Regression analysis - mean

1. Given the following data set:

X Y XY X2
2 6.1 12.2 4
3 7.3 21.9 9
5 10.4 52 25
5 9.4 47 25
6 10.7 64.2 36
7 12.1 84.7 49
28.0 56.0 282.0 148.0
™
ANOVA TABLE
Source Sum of Squares df Mean Square
Regression 24.641 1 24.641
Error .06123 4 .0153
Total 25 5

_
a. Calculate X:
_
b. Calculate Y:
_
c. Calculate the Slope: B = ΣXY− n(X )(Y )/∑ X2 - n(X)2

_ _
d. Calculate the Y-intercept: A = Y −B(X)

e. Write the regression equation; YC = A + B(X):

f. Predict YC for X =15:

g. Calculate the coefficient of determination:

h. Should you assume a significant relationship between the dependent and independent variables based on a 5% significance level?

You have been asked to support analysis of acquisition decisions involving net present value analysis.

1. You are analyzing the net present value of a project over a 16 year period. Based on the rates in the textbook, what is the actual discount rate you would use given that your analysis must consider the effects of inflation/deflation?

2. What is the present value of $25,000 that you will receive at the end of two years?

3. What is the present value of $2,000 a month over the next 3 years?

4. Cash Flow Scenario: Lease. Annual payments of $50,000 paid at the beginning of each of the next five years (total of $250,000). What is the NPV of all lease payments?

5. What is the net present value of a lease that requires you to pay $10,000 at the beginning of each year for the next five years and includes a provision for a rebate of $5,000 at eh end of Year 5?

6. What is the net present value of an item that has a purchase price of $20,000, requires $1,000 maintenance at the end of each year except year 4, and is expected to have a salvage valueof $1,000 at the end of the 5 year useful life?