Continuation of E6-23: regression analysis (Learning Objective 5)

Refer to the Flower Power data in E6-22. Use Microsoft Excel to:

1. Run a regression analysis (use Excel shown on pages 324 or 325).

2. Determine the firm’s cost equation (use the output from the Excel Regression shown in Exhibit 6-15).

3. Determine the R-square (use the output from the Excel Regression shown in Exhibit 6-15). What does Flower Power’s R-square indicate?

4. Predict van operating costs at a volume of 15,000 miles.

5. Compare your prediction in Question 4 to your prediction in E6-23.