Consider the table below. This time, the historical profitability of eight locat

ID: 405254 • Letter: C

Question

Consider the table below. This time, the historical profitability of eight locations is listed in the table. Devise a regression equation and predict the profitability of a new site, Ysard, which has a value of 6 on Office Space, 2 on Middle Class Population, 8 on Competition, and 1 on Visibility. (Show all calculations)

Consider the table below. This time, the historical profitability of eight locations is listed in the table. Devise a regression equation and predict the profitability of a new site, Ysard, which has a value of 6 on Office Space, 2 on Middle Class Population, 8 on Competition, and 1 on Visibility.

Explanation / Answer

Coefficients

Standard Error

t Stat

P-value

Intercept

3.338205

30.3361

0.110041

0.919325

Office space

13.2476

3.47509

3.812159

0.031741

Middle

7.996792

2.352448

3.399349

0.042482

Competition

51.28905

3.909146

13.12027

0.000956

Visibility

4.45503

3.770669

1.181496

0.322535

The fitted regression equation is

Profit = b0 + b1*Office Space + b2*Middle Class Population + b3*Competition + b4* Visibility

=3.3382 + 13.2476* Office Space + 7.9968* Middle Class Population + 51.2891* Competition + 4.4550* Visibility

Predicted profitability for a new site with office space = 6, middle class population = 2, competition =8, and visibility = 1 is

=3.3382 + 13.2476* 6 + 7.9968* 2 + 51.2891* 8 + 4.4550* 1 = $513.585.