Jim Royo,manager of Billings Building Supply (BBS),wants to develop a model to forecast BBS's monthly sales (in $1,000's). He selects the dollar value of residential building permits (in $10,000)as the predictor variable. An analysis of the data yielded the following tables. Using $\alpha$ = 0.05 the critical value of the Durbin-Watson statistic,d_U,is _________. A) 1.54 B) 1.42 C) 1.43 D) 1.44 E) 1.85

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Based on the given data, the calculated Durbin-Watson statistic is 1.57. The critical value of dL and dU at 0.05 level of significance for n-k-2 = 8 degrees of freedom is calculated using a statistical table and found to be 1.43 and 1.61, respectively. Since the calculated Durbin-Watson statistic (1.57) falls between dL (1.43) and dU (1.61), we conclude that there is no evidence of serial correlation among the residuals. Therefore, we can use the regression model for forecasting BBS's monthly sales based on the dollar value of residential building permits.

Jim Royo,manager of Billings Building Supply (BBS),wants to Develop a Model