SCENARIO 14-6
One of the most common questions of prospective house buyers pertains to the cost of heating in dollars (Y). To provide its customers with information on that matter, a large real estate firm used the following 2 variables to predict heating costs: the daily minimum outside temperature in degrees of Fahrenheit ( X 1 ) and the amount of insulation in inches ( X 2 ). Given below is EXCEL output of the regression model.

Also SSR (X 1 | X 2 ) = 8343.3572 and SSR (X 2 | X 1 ) = 4199.2672
-Referring to Scenario 14-5,what fraction of the variability in sales is explained by spending on capital and wages?
A)27.0%
B)50.9%
C)68.9%
D)83.0%

Question

SCENARIO 14-6
One of the most common questions of prospective house buyers pertains to the cost of heating in dollars (Y). To provide its customers with information on that matter, a large real estate firm used the following 2 variables to predict heating costs: the daily minimum outside temperature in degrees of Fahrenheit ( X 1 ) and the amount of insulation in inches ( X 2 ). Given below is EXCEL output of the regression model.

Also SSR (X 1 | X 2 ) = 8343.3572 and SSR (X 2 | X 1 ) = 4199.2672
-Referring to Scenario 14-5,what fraction of the variability in sales is explained by spending on capital and wages?
A)27.0% 
B)50.9% 
C)68.9% 
D)83.0%

Quizplus · Accepted Answer

The R-squared value in the EXCEL output is 0.689, which means that 68.9% of the variability in heating costs is explained by the two independent variables (daily minimum outside temperature and amount of insulation).

SCENARIO 14-6 One of the Most Common Questions of Prospective House Buyers