Reference no: EM13582322

Fran's Convenience Marts are located throughout a metropolitan area. Fran, the owner, would like to expand into other communities. As part of her presentation to the local bank, she would like to better understand the factors that make a particular outlet profitable. She must do all the work herself, so she will not be able to study all her outlets. She selects a random sample of 15 marts and records the average daily sales (Y), the floor space (areas), the number of parking spots, and the median income of families in each region. The sample information is reported below:

Sampled       Daily                     Store               Parking                          Income

Mart              Sales ($)               Area               Spaces                       ($ thousands)

1                      $1840            532                 6                                  $44

2                      1746              478                 4                                  51

3                      1812              530                 7                                  45

4                      1806              508                 7                                  46

5                      1792              514                 5                                  44

6                      1825              556                 6                                  46

7                      1811              541                 4                                  49

8                      1803              513                 6                                  52

9                      1830              532                 5                                  46

10                    1827               537                 5                                  46

11                    1764               499                 3                                  48

12                    1825               510                 8                                  47

13                    1763               490                 4                                  48

14                    1846               516                 8                                  45

15                    1815               482                 7                                  43

a. Determine the regression equation.

b. What is the value of R? Comment on the value.

c. Conduct a global hypothesis test to determine if any of the independent variables are different from zero. Test at a significance level of .05.

d. Conduct individual hypothesis tests to determine if any of the independent variables can be dropped. Test at a significance level of .05.