Analytical Methods In Economics And Finance

Deciding where to locate a new retail store is one of the most important decisions that a manager can make. The manager of a chain of video rental store hires you as an expert in business analysis and wants you to help him select a location for a new store. The manager informs you that he would like to use annual gross revenue as a measure of success. As the project commences, you decide to conduct a regression analysis and find
that the determination of success depends on the following variables:

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Analytical Methods In Economics And Finance

Analytical Methods In Economics And Finance helps you to determine the economics and finance of any organization very easily.

(i) Report the summary statistics of the variables selected as determinants of success of a store. Briefly explain the distributions of these variables and what these tell you about the underlying data.

(ii) Represent the regression model you want to estimate and provide clear justification of your preferred estimation method of the model.

(iii) Report your estimated model and explain how PEOPLE, INCOME, COMPTORS and PRICE affect the dependent variable.

(iv) Which independent variable(s) significantly explain the dependent variable? Show your work.

(v) Based on your estimated model, predict the gross annual revenue of a store for the mean value of the variables PEOPLE, INCOME, COMPTORS and PRICE. What do you observe?

(vi) What is the coefficient of determination adjusted for degrees of freedom (RR?22)? What do this statistics tell you about the regression equation?

(vii) If the manager of the store tells you to use a completely different set of variables that could potentially explain sales revenue, how would you defend your current selection of the variables? Clearly show all required steps involved in the process of justifying your inference.

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