A suburban hotel derives its revenue from its hotel and restaurant operations. T

Question

A suburban hotel derives its revenue from its hotel and restaurant operations. The owners are interested in the relationship between the number of rooms occupied on a nightly basis and the revenue per day in the restaurant. Below is a sample of 25 days (Monday through Thursday) from last year showing the restaurant income and number of rooms occupied.

Determine the coefficient of correlation between the two variables. (Round your answer to 3 decimal places.)

State the decision rule for 0.01 significance level: H0: 0; H1: > 0 (Round your answer to 3 decimal places.)

Is it reasonable to conclude that there is a positive relationship between revenue and occupied rooms? Use the 0.01 significance level.

What percent of the variation in revenue in the restaurant is accounted for by the number of rooms occupied? (Round your answer to 1 decimal place.)

A suburban hotel derives its revenue from its hotel and restaurant operations. The owners are interested in the relationship between the number of rooms occupied on a nightly basis and the revenue per day in the restaurant. Below is a sample of 25 days (Monday through Thursday) from last year showing the restaurant income and number of rooms occupied.

Explanation / Answer

Simple linear regression results:
Dependent Variable: Occupied
Independent Variable: Income
Occupied = -19.24322 + 0.04294019 Income
Sample size: 25
R (correlation coefficient) = 0.1026866
R-sq = 0.010544538
Estimate of error standard deviation: 18.18379

Parameter estimates:

Analysis of variance table for regression model:

Hence,

b) Pearson correlation = 0.103

Reject Ho if t > 2.500

Test statistic = 0.50

c) Fail to reject; No

d) 1.1 %

Parameter Estimate Std. Err. Alternative DF T-Stat P-value Intercept -19.24322 124.56354 0 23 -0.15448517 0.8786 Slope 0.04294019 0.086733007 > 0 23 0.49508476 0.3126

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