Beachcomber Ltd in a local car dealership that sells used and new vehicles. The manager of the company wants to know how different variables affect the sales of his vehicles. A random sample of yearly data was taken with the view to testing the model: SALES=?+?AGE+?MIL+?ENG
Where SALES= amount that a vehicle is sold for($000’s), AGE = age of the vehicle, MIL= the total mileage of the vehicle at the point of sale and ENG = the size of the engine. The sample of data was processed using MINITAB and the following is an extract of the output obtained:
The regression equation is*****
PredictorCoefStDevt-ratio
p-value
Constant 1.7586 0.2525 6.9648
0.0000
AGE 0.2124 0.3175 *
0.5042
MIL -0.7527 0.3586 -2.0991
**
ENG 4.8124 0.6196 7.7664
Analysis of Variance
SourceDFSSMSF
p
Regression 3 413.1291 138.7097 ***
0.00
Error50 457.7607 2.2888
Total53
d) Hence test whether ? is significant. Give reasons for your answer.
e) Perform the F Test making sure to state the null and alternative hypothesis.
f) Given an interpretation of the term “R-sq” and comment on its value.
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