TABLE 14-4
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:
-Referring to Table 14-4, what minimum annual income would an individual with a family size of 4 and 16 years of education need to attain a predicted 10,000 square foot home (House = 100)?
A) $44.14 thousand
B) $56.75 thousand
C) $178.33 thousand
D) $211.85 thousand

Question

TABLE 14-4
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: 
-Referring to Table 14-4, what minimum annual income would an individual with a family size of 4 and 16 years of education need to attain a predicted 10,000 square foot home (House = 100)?
A) $44.14 thousand 
B) $56.75 thousand 
C) $178.33 thousand 
D) $211.85 thousand

Quizplus · Accepted Answer

Using the regression equation, we can solve for the required income:
House size = 12.528 + 0.625Income + 13.65Size + 24.895School
100 = 12.528 + 0.625Income + 13.65(4) + 24.895(16)
100 = 12.528 + 0.625Income + 221.6
0.625Income = -134.128
Income = -214.60
Since a negative income is impossible, we can disregard this result and conclude that the required minimum annual income is the highest value in the answer choices, which is $211.85 thousand (option D).

TABLE 14-4 A Real Estate Builder Wishes to Determine How House Size