Question

The College of Business at Northeast College is accumulating data as a first step in the preparation of next year's budget development. One cost that is being looked at closely is administrative costs as a function of student credit hours. Data on administrative costs and credit hours for the past thirteen months are shown below:

Month	Administrative Costs				Credit Hours
July		$	136,301		1,000
August			96,613		721
September			246,580		1,998
October			244,394		1,606
November			293,263		1,915
December			226,449		1,718
January			268,137		1,945
February			301,000		1,979
March			272,462		1,670
April			261,925		1,729
May			326,978		1,966
June			254,418		1,026
July			219,167		921
Total		$	3,147,687		20,194
Average		$	242,130		1,553

The controller's office has analyzed the data and has given you the results from the regression analysis:

SUMMARY OUTPUT
Regression Statistics
Multiple R	0.7985572
R Square	0.637693600
Adjusted R Square	0.604756654
Standard Error	40,005.80589
Observations	13

ANOVA
	df	SS	MS	F	Significance F
Regression	1	30,986,661,233	30,986,661,233	-19.3610424	0.00106299
Residual	11	17,605,109,557	1,600,464,505.0
Total	12	48,591,770,790

	Coefficients	Standard Error	t Stat	P-value	Lower 95%	Upper 95%	Lower 95.0%	Upper 95.0%
Intercept	72,045.32692	40,215.47137	1.79148284	0.10073652	-16,468.32876	160,558.9826	-16,468.32876	160,558.9826
X Variable 1	109.4928073	24.88405898	4.400118459	0.00106299	54.72336273	164.262252	54.72336273	164.262252

  
The correlation coefficient (rounded to the 3^rd decimal) for the regression equation for administrative costs is:

• 0.735.

• 0.723.

• 0.799.

• 0.833.

Answer 1

The correct answer is 0.799

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The correlation coefficient r can be calculated using the coefficient of determination R square.

Correlation coefficient r = $\sqrt{R square}$ = $\sqrt{0.637693600}$

Correlation coefficient = 0.799