Homework Assignment

Question: #1032

Homework Assignment

All the calculations 1-7 must be done with Excel.

Consider the following data from a small bookstore.

Number of sales people working-----------------Sales (in $1000)

2--------------------------------------------------------------10

3--------------------------------------------------------------11

7--------------------------------------------------------------13

9--------------------------------------------------------------14

10-------------------------------------------------------------18

10-------------------------------------------------------------20

12-------------------------------------------------------------20

15-------------------------------------------------------------22

16-------------------------------------------------------------22

20-------------------------------------------------------------26

x = 10.4-----------------------------------------------------y = 17.6

SD(x) = 5.64-----------------------------------------------SD(y) = 5.34

1. Calculate the mean and standard deviation of # of sales people (x) and sales (y). Find sample size n.

2. Calculate the correlation coefficient with all three methods (covariance method, z-score method, and correlation tool in Excel).

3. Find b0 and b1 for the linear regression model with all three methods (two different formulas and Solver). Interpret the meaning of b1 of this linear regression model.

4. Calculate Se and SST.

5. Calculate R square with both methods (correlation coefficient method and the formula r square = 1 - SSE/SST). Interpret the meaning of R square of this linear regression model.

6. Use Regression tool in Excel to find b0, b1, SSE, SST, r, R square, and Se.

7. Estimate the sales if the number of sales people working is 8, 13, and 19, respectively.

Solution: #1036

Homework Assignment

Q. 1. True or False: A franchisor can suggest retail prices but cannot mandate them. (You only need to answer True or False by circling or highlighting your answer)(5 points).

            TRUE

            FALSE

Q. 2. What are the advantages and disadvantages associated with having a sole proprietorship? (10 points)

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a.         general estimates of costs and sales, but not the basis for them.

b.         material facts such as the basis of projected earnings figures.

c.         no information.

d.         start-up requirements, but not renewal conditions.

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