A local grocery store wants to predict its daily sales in dollars. The manager b

Question

A local grocery store wants to predict its daily sales in dollars. The manager believes that the amount of newspaper advertising significantly affects sales. He randomly selects 7 days of data consisting of daily grocery store sales (in thousands of dollars) and advertising expenditures (in thousands of dollars). The Excel/MegaStat output given above summarizes the results of the regression model.

What is the value of the simple coefficient of determination?

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r2 0.762 R 0.873 n 7 k 1 Std. Error 11.547 Dep. Var. Sales ANOVA Fp-value .0103 af 1 2,133.3333 16.00 5 133.3333 9 Source MS Regression 2,133.3333 Residual 666.6667 Total 2,800.0000 Regression output Confidence interval Variables Coefficients std. error t(df- 5) p-value 95% lower 95% upper Intercept 63.3333 7.9682 7.948 .000542.8505 83.8162 Advertising 6.6667 1.6667 4.000 .0103

Explanation / Answer

Solution :

Coefficient of determination is the proportion of the variance in the dependent variable that is predictable from the independent variable . From the given output, the value of coefficient of determiantion is 0.762.

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