17. Ethan Babson, CFA, is a fairly tough professor and he has handed each of his graduate students a sheet of paper with the information in Exhibit 1. Babson told the students that the independent variable is the ratio of net-income-to-sales for the 24 restaurants in his restaurant chain, and the dependent variable is the ratio of cashflow-from-operations-to-sales for those restaurants. Using the information in Exhibit 1, answer each of the following questions and be sure to label your answers so that I can read them and know which question you are answering.Circle your answer if the question is asking for a specific value.Show your work for each question.

Exhibit 1: Regression Output

Regression Statistics
Multiple R	X
R-squared	0.7436
Standard error	0.0213
Observations	24
ANOVA	degrees of freedom	Sum of squares	Mean sum of squares	F-statistic
Regression	X	0.029	X	X
Residual	X	0.010	X
Total	X	0.039
	Coefficients	Standard Error	t-statistic
Intercept	0.077	0.0068	X
Slope	0.826	0.103	X

a. Using the information given in Exhibit 1, fill in the blanks in each space where there is a red X with the correct value for that space. There are nine values that you need to fill in. If you are writing the answers down rather than filling in the table, be sure that you label the answer clearly and show your work if it requires a calculation.

b. Which of the values in the table is the coefficient of determination and what does that value tell us (i.e., why is it a number we should be familiar with)?

c. If a ratio of net-income-to-sales of 8% is used as the independent variable in a regression equation, then what would be the predicted value for the ratio of cashflow-from-operations-to-sales?

d. Test the significance of the slope at a 1% significance level using a t-test. Show your critical value and your reject or fail-to-reject conclusion.

e. Test the overall significance of the regression at a 5% significance level using the F-test. Show your critical value and your reject or fail-to-reject conclusion.