Reference no: EM13902813
Business Case - Baldwin Computer Sales (C)-
In the Baldwin Computer Sales case, one of the areas of concern regarding the student purchase program was whether defaulting on the computer payments is independent of the university at-tended by the student. Using the BALDWIN data file on the text CD, apply the appropriate chi-square test from this chapter to determine whether these variables could be independent. Use a level of significance of your choice in reaching a conclusion, and identify and interpret the p-value for the test. What, if any, recommendations would you make to Baldwin management on the basis of this test?
1. Considering the shim that the two houses in question did not sell for their lair market value:
a. Compare the selling prices of the two houses to the average selling price of all houses sold in the most recent three-month period. Does the difference appear to be substantial?
b. Provide at least two reasons why the comparison in part (a) is not fair -i.e., describe at least two pricing factors that are not being considered in drawing the comparison in part (a).
c. In making their argument, the complaining sellers are relying heavily on the average selling price ($104,250) stated in the article for all homes sold in the area during the previous twelve months during a weakening housing market. Compare the $104,250 average with that for all houses sold in the area during the most recent three months, then comment on how this comparison might affect the validity of their argument.
2. Use a multiple regression model to estimate PRICE as a function of SQFEET, BEDROOMS, AGE, DALLAS, and EASTON.
a. Interpret the partial regression coefficients in the equation. Specifically, comment on the sign and numerical value of the partial regression coefficient for EASTON in terms of the claim that Easton Realty Company has been underpricing its residential properties relative to other real estate companies.
b. For each of the two houses that are the subject of complaints, construct and interpret the 95% prediction interval for a comparable house that is being sold by a realtor other than Easton.
c. On the basis of your analyses in question I and in parts la) and (hl of this question, prepare a brief, convincing response to the claims of underpricing.