Question
An agent for a residential real estate company in a suburb located outside of Washington, DC, has the business objective of developing more accurate estimates
An agent for a residential real estate company in a suburb located outside of Washington, DC, has the business objective of developing more accurate estimates of the monthly rental cost for the apartments. Toward that goal, the agent would like to use the size of an apartment, as defined by square footage to predict the monthly rental cost. The agent selects a sample of 48 one-bedroom apartments and collects and stores the data in Q1 sheet.
a. Construct a scatterplot. What does it show? b. Write down the linear regression model. c. Interpret the meaning of b0 and b1. d. Predict the mean monthly rent for an apartment that has 800 square feet. e. Why would it not be appropriate to use the model to predict the monthly rent for apartments that have 1500 square feet?
f. Determine the coefficient of determination (r2) and interpret its meaning. g. Your friends Jim and Jennifer are considering signing a lease for a one-bedroom apartment in this residential neighborhood. They are trying to decide between 2 apartments, one with 800 square feet for a monthly rent of $1130 and the other with 830 square feet for a monthly rent of $1410. Based on your answer from parts (a) to (d), which apartment do you think is a better deal?
| Size (Square feet) | Rent ($) |
| 524 | 1110 |
| 616 | 1175 |
| 666 | 1190 |
| 830 | 1410 |
| 450 | 1210 |
| 550 | 1225 |
| 780 | 1480 |
| 815 | 1490 |
| 1070 | 1495 |
| 610 | 1680 |
| 835 | 1810 |
| 660 | 1625 |
| 590 | 1469 |
| 675 | 1395 |
| 744 | 1150 |
| 820 | 1140 |
| 912 | 1220 |
| 628 | 1434 |
| 645 | 1519 |
| 840 | 1105 |
| 800 | 1130 |
| 804 | 1250 |
| 950 | 1449 |
| 800 | 1168 |
| 787 | 1224 |
| 960 | 1391 |
| 750 | 1145 |
| 690 | 1093 |
| 840 | 1353 |
| 850 | 1530 |
| 965 | 1650 |
| 1060 | 1740 |
| 665 | 1235 |
| 775 | 1550 |
| 960 | 1545 |
| 827 | 1583 |
| 655 | 1575 |
| 535 | 1310 |
| 625 | 1195 |
| 749 | 1200 |
| 634 | 1185 |
| 641 | 1444 |
| 860 | 1385 |
| 740 | 1275 |
| 593 | 1050 |
| 880 | 1650 |
| 895 | 1340 |
| 692 | 1560 |
| Age | Income (1000s) | Cards have | Response |
| |||||||||||||||||||
| 66 | 134 | 6 | 0 | ||||||||||||||||||||
| 34 | 177 | 4 | 0 | ||||||||||||||||||||
| 18 | 191 | 6 | 0 | ||||||||||||||||||||
| 60 | 169 | 1 | 0 | ||||||||||||||||||||
| 53 | 104 | 1 | 1 | ||||||||||||||||||||
| 35 | 79 | 9 | 0 | ||||||||||||||||||||
| 29 | 115 | 5 | 1 | ||||||||||||||||||||
| 75 | 115 | 10 | 0 | ||||||||||||||||||||
| 50 | 141 | 1 | 0 | ||||||||||||||||||||
| 75 | 102 | 10 | 0 | ||||||||||||||||||||
| 49 | 63 | 10 | 0 | ||||||||||||||||||||
| 49 | 186 | 7 | 1 | ||||||||||||||||||||
| 23 | 135 | 3 | 1 | ||||||||||||||||||||
| 19 | 22 | 7 | 1 | ||||||||||||||||||||
| 69 | 165 | 4 | 0 | ||||||||||||||||||||
| 64 | 36 | 1 | 1 | ||||||||||||||||||||
| 40 | 122 | 6 | 1 | ||||||||||||||||||||
| 27 | 27 | 7 | 1 | ||||||||||||||||||||
| 59 | 122 | 5 | 1 | ||||||||||||||||||||
| 45 | 140 | 8 | 1 | ||||||||||||||||||||
| 43 | 120 | 5 | 0 | ||||||||||||||||||||
| 28 | 77 | 1 | 0 | ||||||||||||||||||||
| 38 | 57 | 10 | 0 | ||||||||||||||||||||
| 64 | 98 | 4 | 0 | ||||||||||||||||||||
| 51 | 83 | 9 | 0 | ||||||||||||||||||||
| 25 | 31 | 9 | 0 | ||||||||||||||||||||
| 51 | 131 | 2 | 0 | ||||||||||||||||||||
| 50 | 49 | 6 | 0 | ||||||||||||||||||||
| 74 | 175 | 8 | 1 | ||||||||||||||||||||
| 55 | 14 | 0 | 0 | ||||||||||||||||||||
| 50 | 37 | 9 | 1 | ||||||||||||||||||||
| 42 | 22 | 4 | 1 | ||||||||||||||||||||
| 47 | 113 | 4 | 1 | ||||||||||||||||||||
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Auditing Theory And Practice
Authors: Jerry R. Strawser, Robert H. Strawser, Roger H. Hermanson
9th Edition
0873939336, 9780873939331
