A fast-food franchise would like to make decisions about their pricing policy. In order to assess...

A fast-food franchise would like to make decisions about their pricing policy. In order to assess the effect of different price structures on sales a sample of 75 observations is collected. The company collects data on monthly sales revenues (in $1,000 units) and price (in $1 units).

SUMMARY OUTPUT

Regression Statistics
Multiple R	0.625540559
R Square	0.391300991
Adjusted R Square	0.382962648
Standard Error	5.09685747
Observations	75

ANOVA
	df	SS	MS	F	Significance F
Regression	1	1219.091184	1219.091184	46.92791	1.97077E-09
Residual	73	1896.390793	25.97795607
Total	74	3115.481978

	Coefficients	Standard Error	t Stat	P-value	Lower 95%	Upper 95%
Intercept	121.9001755	6.526290622	18.67832473	0.000000	108.8932971	134.907054
PRICE	-7.829074013	1.142864631	-6.850394879	0.000000	-10.10679994	-5.551348089

a). (10) Test the hypothesis that price has a significant relationship with monthly sales revenues. Choose a significance level of 5%. Show all your work.

b). (10) Calculate the p-value for the test from a). Show a sketch of the p-value. Perform the test using the p-value approach.

c). (5) Interpret the slope coefficient.

d). (5) Based on your answer from c), do you think a strategy of price reduction is a good idea ? Motivate your answer.

d). (5) Comment on the goodness of fit of the model. In particular, interpret the coefficient of determination. Do you think that we have a good fit? Explain your answer.

Expert Solution

orchestra answered 1 year ago

Fast Food in Hospitals Identify the benefits and concerns about permitting a fast food franchise to...

Fast Food in Hospitals Identify the benefits and concerns about permitting a fast food franchise to set up an outlet in your facility. How would you address the controversies connected with the “bad health” image of this sector of the foodservice industry? Nutritional information should be included in this discussion. Virtually all fast food companies include nutritional data on their websites.

As a manager of a fast food franchise, Franklin Hinton was concerned about the media reports...

As a manager of a fast food franchise, Franklin Hinton was concerned about the media reports he had been listening to about worker demands for wage increases that might soon become an economic reality. Even though Franklin’s store was considered to be successful on every financial measure, doubling wages, without a doubt, would create a significant increase on menu prices which would result in financial disaster. Fast food employees in many parts of the country were picketing and getting lots...

You are the manager of a restaurant for a fast-food franchise. Last month, the mean waiting...

You are the manager of a restaurant for a fast-food franchise. Last month, the mean waiting time at the drive-through window for branches in your geographical region, as measured from the time a customer places an order until the time the customer receives the order, was 3.6 minutes. You select a random sample of 81 orders. The sample mean waiting time is 3.79 minutes, with a sample standard deviation of 0.9 minute. At the 0.10 level of significance, is there...

The management of a national chain of fast-food outlets is selling a permanent franchise in Seattle,...

The management of a national chain of fast-food outlets is selling a permanent franchise in Seattle, Washington. Past experience suggests that t years from now, the franchise will be generating profit in perpetuity at the rate of f (t) = 110,000 + 900t dollars per year. If the prevailing interest rate remains fixed at 4% compounded continuously, what is the present value of the franchise?

Santosh operates a successful fast-food franchise called “Santosh’s Food”. Tasty Pty Ltd is keen to open...

Santosh operates a successful fast-food franchise called “Santosh’s Food”. Tasty Pty Ltd is keen to open a ‘Santosh’s Food’ outlet in the Melbourne suburb of Bundoora. The parties reach an agreement that Tasty Pty Ltd will operate a Santosh’s Food restaurant in Bundoora for a period of five (5) years. The agreement contains the following terms: 9. Santosh promises that he will not open another Santosh’s Food franchise within the Bundoora area during the franchise period (that is, five (5)...

Subway, the fast food restaurant franchise, announced in early 2018 it planned to bring back the...

Subway, the fast food restaurant franchise, announced in early 2018 it planned to bring back the “$5 Footlong” promotion. Hundreds of Subway franchise owners protested the promotion saying that they cannot afford to sell the footlong sub sandwiches for $5. You'll want to review the Subway webpage featured in the Chapter 8 module. Assume that the costs related to a Subway footlong and a Subway franchise include the following Cost Item Details Cost per sandwich Meats, cheeses, toppings Per footlong...

A Business Dilemma Subway, the fast food restaurant franchise, announced in early 2018 it planned to...

A Business Dilemma Subway, the fast food restaurant franchise, announced in early 2018 it planned to bring back the “$5 Footlong” promotion. Hundreds of Subway franchise owners protested the promotion saying that they cannot afford to sell the footlong sub sandwiches for $5. You'll want to review the Subway webpage featured in the Chapter 8 module. Assume that the costs related to a Subway footlong and a Subway franchise include the following Cost Item Details Cost per sandwich Meats, cheeses,...

Mabel and Alan, who are in the 32% tax bracket, recently acquired a fast-food franchise. Each...

Mabel and Alan, who are in the 32% tax bracket, recently acquired a fast-food franchise. Each of them will work in the business and receive a salary of $175,000. They anticipate that the annual profits of the business, after deducting salaries, will be approximately $450,000. The entity will distribute enough cash, as a dividends distribution, each year to Mabel and Alan to cover their Federal income taxes associated with the franchise (excluding any tax related to their salaries). If an...

Subway, the fast food restaurant franchise, recently announced it is bringing back the “$5 Footlong” promotion....

Subway, the fast food restaurant franchise, recently announced it is bringing back the “$5 Footlong” promotion. Hundreds of Subway franchise owners are protesting the promotion, saying that they cannot afford to sell the footlong sub sandwiches for $5. Assume that the costs related to a Subway footlong and a Subway franchisee include the following: Cost item Details Cost per sandwich Food ingredients Per footlong $ 2.00 Labor cost per footlong Labor $14.00/hour wage rate, each worker can make 7 sandwiches...

1. Corey is the city sales manager for “RIBS,” a national fast food franchise. Every working...

1. Corey is the city sales manager for “RIBS,” a national fast food franchise. Every working day, Corey drives his car as follows: Miles Home to office 20 Office to RIBS No. 1 15 RIBS No. 1 to No. 2 8 RIBS No. 2 to No. 3 3 RIBS No. 3 to office 10 Office to home 20 Corey’s deductible daily mileage is: a. 0 miles. b. 36 miles. c. 46 miles. d. 56 miles. e. 76 miles. 2. ...

Question