Question
In: Statistics and Probability
Table #10.1.6 contains the value of the house and the amount of rental income in a...
Table #10.1.6 contains the value of the house and the amount of rental income in a year that the house brings in ("Capital and rental," 2013). Create a scatter plot and find a regression equation between house value and rental income. Then use the regression equation to find the rental income a house worth $230,000 and for a house worth $400,000. Which rental income that you calculated do you think is closer to the true rental income? Why? Table #10.1.6: Data of House Value versus Rental Value Rental Value Rental Value Rental Value Rental 81000 6656 77000 4576 75000 7280 67500 6864 95000 7904 94000 8736 90000 6240 85000 7072 121000 12064 115000 7904 110000 7072 104000 7904 135000 8320 130000 9776 126000 6240 125000 7904 145000 8320 140000 9568 140000 9152 135000 7488 165000 13312 165000 8528 155000 7488 148000 8320 178000 11856 174000 10400 170000 9568 170000 12688 200000 12272 200000 10608 194000 11232 190000 8320 214000 8528 208000 10400 200000 10400 200000 8320 240000 10192 240000 12064 240000 11648 225000 12480 289000 11648 270000 12896 262000 10192 244500 11232 325000 12480 310000 12480 303000 12272 300000 12480
Solutions
Expert Solution
SOl:
in excel go to inert >scatterchart
we observe a positive relationship between value and rental.
Then Go to
Data analysis >Regression
You will get below
| SUMMARY OUTPUT | ||||||
| Regression Statistics | ||||||
| Multiple R | 0.764716 | |||||
| R Square | 0.58479 | |||||
| Adjusted R Square | 0.575764 | |||||
| Standard Error | 1441.625 | |||||
| Observations | 48 | |||||
| ANOVA | ||||||
| df | SS | MS | F | Significance F | ||
| Regression | 1 | 1.35E+08 | 1.35E+08 | 64.78736 | 2.5E-10 | |
| Residual | 46 | 95600982 | 2078282 | |||
| Total | 47 | 2.3E+08 | ||||
| Coefficients | Standard Error | t Stat | P-value | Lower 95% | Upper 95% | |
| Intercept | 5363.865 | 567.2408 | 9.456062 | 2.34E-12 | 4222.068 | 6505.661 |
| Value | 0.024358 | 0.003026 | 8.04906 | 2.5E-10 | 0.018267 | 0.03045 |
Regression equation is
Rental=5363.865+0.024358*Value
use the regression equation to find the rental income a house worth $230,000 and for a house worth $400,000.
For value=230000
Rental=5363.865+0.024358*230000
predicted Rental=10966.2
For value=400000
Rental=5363.865+0.024358*400000
Rental=15107.07
Rental income a house worth $230,000 is closer to true rental income
orchestra answered 2 years agoRelated Solutions
The table below contains the value of the house and the amount of rental income in...
The table below contains the value of the house and the amount
of rental income in a year that the house brings in ("Capital and
rental," 2013).
Table: Data of House Value versus Rental
Value
Rental
Value
Rental
Value
Rental
Value
Rental
81000
6656
77000
4576
75000
7280
67500
6864
95000
7904
94000
8736
90000
6240
85000
7072
121000
12064
115000
7904
110000
7072
104000
7904
135000
8320
130000
9776
126000
6240
125000
7904
145000
8320
140000
9568
140000
9152...
Table #10.1.6 contains the value of the house and the amount of rental income in a...
Table #10.1.6 contains the value of the house and the amount of
rental income in a year that the house brings in ("Capital and
rental," 2013). Find the correlation coefficient and coefficient of
determination and then interpret both.
VALUE
RENTAL
VALUE
RENTAL
VALUE
RENTAL
VALUE
RENTAL
81000
6656
77000
4576
75000
7280
67500
6864
95000
7904
94000
8736
90000
6240
85000
7072
121000
12064
115000
7904
110000
7072
104000
7904
135000
8320
130000
9776
126000
6240
125000
7904
145000
8320...
The table below contains information on 48 houses: the value of the house and the amount of rental income in a year that the house brings in ("Capital and rental," 2013).
The table below contains information on 48 houses: the value of the house and the amount of rental income in a year that the house brings in ("Capital and rental," 2013).
Table: Data of House Value versus Rental
Value
Rental
Value
Rental
Value
Rental
Value
Rental
81000
6656
77000
4576
75000
7280
67500
6864
95000
7904
94000
8736
90000
6240
85000
7072
121000
12064
115000
7904
110000
7072
104000
7904
135000
8320
130000
9776
126000
6240
125000
7904
145000...
We are considering investing in a house that will cost $460,000 and generate weekly rental income...
We are considering investing in a house that will cost $460,000
and generate weekly rental income of $440.
Calculate the
value of our
investment ftve years from
today, assuming that we fund our investment using
a $150,000 cash down payment and a five-year interest-only loan for
the balance. This loan incurs interest of 6.1% per annum. We
deposit all excess cash in a bank account that earns interest of
2.4% per annum compounded monthly.
Make the following additional
assumptions, which...
The following table contains summary statistics on house sales in Canberra (by region) for the last...
The following table contains summary statistics on house sales
in Canberra (by region) for the last 3 months.
REGION
Mean House price
Number of houses sold
Belconnen
$755481
210
Gungahlin
$815826
228
Inner North
$1180106
75
Inner South
$1489622
42
Molonglo Valley
$948222
28
Woden Valley
$1065248
95
Weston Creek
$802488
60
Tuggeranong
$723422
228
The regions of Gungahlin and Molonglo Valley were first settled in
1991 and 2010 respectively. All other regions were settled prior to
1975. How do...
Rick is looking to purchase a rental house at below market value, so he receives advice...
Rick is looking to purchase a rental house at below market
value, so he receives advice from his real estate broker, Dopey.
Dopey explains it is smart to obtain a property between a 3 - 6
percent capitalization rate. Dopey suggested that Rick research the
existing neighboring properties and determine the average price.
Rick got three appraisals for neighboring properties: $500,000,
$450,000, and $375,000. The home he wants to purchase has net
operating income of $27,500 with a cap rate...
4. Billy is considering the purchase of a rental house. The house costs $240,000 and it...
4.
Billy is considering the purchase of a rental house. The house
costs $240,000 and it will generate annual revenues of $15,000 and
annual expenses of $3,000. Nevertheless, Billy will need to borrow
$240,000 at an interest rate of 7% per year in case he decides to
make this investment. Should Billy purchase this house?
A) No, he will lose money.
B) Yes, his profits will be zero.
C) No, his profits will be positive but close to zero.
D)...
The table below contains the amount that a sample of nine customers spent for lunch ($)...
The table below contains the amount that a sample of nine
customers spent for lunch ($) at a fast-food restaurant: 4.88 5.01
5.79 6.35 7.39 7.68 8.23 8.71 9.88 a.Compute the sample mean and
sample standard deviation of the amount spent for lunch.
b.Construct a 99% confidence interval estimate for the population
mean amount spent for lunch ($) at the fast-food restaurant,
assuming the population is normally distributed. c.Interpret the
interval constructed in (b).
Better to use the computer text...
The table below contains the amount that a sample of nine customers spent for lunch ($)...
The table below contains the amount that a sample of nine
customers spent for lunch ($) at a fast-food restaurant:
4.88 5.01 5.79 6.35 7.39 7.68 8.23 8.71 9.88
a. Compute the sample mean and sample standard deviation of the
amount spent for lunch.
b. Construct a 99% confidence interval estimate for the
population mean amount spent for lunch ($) at the fast-food
restaurant, assuming the population is normally distributed.
c. Interpret the interval constructed in (b).
Question 1 The following table contains summary statistics on house sales in Canberra (by region) for...
Question 1
The following table contains summary statistics on house sales
in Canberra (by region) for the last 3 months.
Region
Mean House Price
Number of houses sold
Belconnen
$755481
210
Gungahlin
$815826
228
Inner North
$1180106
75
Inner south
$1489622
42
Molonglo Valley
$948222
28
Woden Valley
$1065248
95
Weston Creek
$802488
60
Tuggeranong
$723422
228
The lake in the Centre of Canberra in Lake Burley Griffin. The
first 3 regions in the table above (that is, Belconnen, Gungahlin...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Determine the net present worth (NPW) of the cash flows given in table below for an...
- Consider the following linear programming problem. min −x1 + 4x2 subject to: • x1 + x2...
- use a financial calculator or a program such as Excel to answer the questions run your...
- In the context of matching hypothesis, which of the following reflects the operation of matching? a....
- 1.1 Discuss challenges related to managing performance and compensating employees from other countries. Give some incidents...
- Project #1 Designing and implementing the Game of Life The main task is to implement (in...
- The future earnings, dividends, and common stock price of Callahan Technologies Inc. are expected to grow...
ADVERTISEMENT