Assignment 4-2

.docx

School

Southern New Hampshire University *

*We aren’t endorsed by this school

Course

510

Subject

Business

Date

Jan 9, 2024

Type

docx

Pages

3

Uploaded by MinisterFlower8309

Report
Jasmine Allen Southern New Hampshire University QSO 510 Dr. Thomas Knopp Assignment 4-2 February 26 th , 2023
A finance manager employed by an automobile dealership believes that the number of cars sold in his local market can be predicted by the interest rate charged for a loan. Interest Rate (%) Number of Cars Sold (100s) 3 10 5 7 6 5 8 2 The finance manager performed a regression analysis of the number of cars sold and interest rates using the sample of data above. Shown below is a portion of the regression output. Regression Statistics Multiple  R 0.998868 R 2 0.997738 Coefficient Intercept 14.88462 Interest Rate -1.61538 1. Are there factors other than interest rate charged for a loan that the finance manager should consider in predicting future car sales? The closer an R square value is to 1, the more accurate the model. In this particular scenario, the R square value is 0.998, which is extremely close to 1. Knowing this information, the finance manager should not need to consider any other factors besides the interest rate charged for a loan in predicting future car sales. 2. Is interest rate charged for a loan the most important factor to be considered in predicting future car sales? Explain your reasoning. The dealership's vice-president of marketing has requested a sales forecast at the prevailing interest rate of 7%. The interest rate charged for a loan is indeed the most important factor in predicting future car sales. This is due to the R square value being so close to 1. 2
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help