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E6-28A (similar to) 3 Question Help o Kate Coughlin, owner of Flower Paradise, operates a local chain of floral shops. Each shop has its own delivery van. Instead of charging a flat delivery fee, Coughlin wants to set the delivery fee based on the distance driven to deliver the flowers. Coughlin wants to separate the fixed and variable portions of her van operating costs so that she has a better idea how delivery distance affects these costs. Flower Paradise does a regression analysis on the next year's data using Excel. The output generated by Excel is as follows: (Click the icon to view the regression analysis.) Requirements 1. Determine the firm's cost equation (use the output from the Excel regression). 2. Determine the R-square (use the output from the Excel regression). What does Flower Paradise's R-square indicate? 3. Predict van operating costs at a volume of 16,500 miles assuming the company would use the cost equation from the Excel regression regardless of its R-square. Should the company rely on this cost estimate? Why or why not? Requirement 1. Determine the firm's cost equation (use the output from the Excel regression). (Enter amounts to two decimal places.) y s X + estion Regression analysis SUMMARY OUTPUT Regression Statistics Multiple R 0.87 R Square 0.75 Adjusted R Square 0.71 Standard Error 153.46 Observations 7 ANOVA df SS MS F Significance F Regression 1 15.39 0.0112 362,391.24 117,751.61 362,391.24 23,550.32 Residual 5 6 Total 480,142.86 Standard Lower 95% Upper 95% Coefficients Error Stat P-value 1784.73 884.55 2.02 0.10 Intercept X Variable 1 -489.09 4,058.55 0.22 0.06 3.92 0.01 0.07 0.36 Print Done OTTO dtv s Ma