SCENARIO 17-1
a Real Estate Builder Wishes to Determine How

SCENARIO 17-1
A real estate builder wishes to determine how house size (House) is influenced by family income
(Income) , family size (Size) , and education of the head of household (School) . House size is
measured in hundreds of square feet, income is measured in thousands of dollars, and education is in
years. The builder randomly selected 50 families and ran the multiple regression. Microsoft Excel
output is provided below: SUMMARY OUTPUT
Regression Statistics
$\begin{array} { l l } \text { Multiple R } & 0.865 \\ \text { R Square } & 0.748 \\ \text { Adjusted R Square } & 0.726 \\ \text { Standard Error } & 5.195 \\ \text { Observations } & 50 \end{array}$
ANOVA
$\begin{array} { l c c c c c } & d f & \text { SS } & \text { MS } & F & \text { Signif } F \\ \text { Regression } & & 3605.7736 & 1201.9245 & & 0.0000 \\ \text { Residual } & & 1214.2264 & 26.3962 & & \\ \text { Total } & 49 & 4820.0000 & & & \end{array}$

$\begin{array} { l c l c c } & \text { Coeff } & \text { StdError } & t \text { Stat } & P \text {-value } \\ \text { Intercept } & - 1.6335 & 5.8078 & - 0.281 & 0.7798 \\ \text { Income } & 0.4485 & 0.1137 & 3.9545 & 0.0003 \\ \text { Size } & 4.2615 & 0.8062 & 5.286 & 0.0001 \\ \text { School } & - 0.6517 & 0.4319 & - 1.509 & 0.1383 \end{array}$
-Referring to Scenario 17-1, one individual in the sample had an annual income of $40,000, a family size of 1, and an education of 8 years. This individual owned a home with an area of 1,000
Square feet (House = 10.00) . What is the residual (in hundreds of square feet) for this data point?

A) -6.99
B) -5.35
C) 5.40
D) 16.99