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.