4. Market Planning, Inc. a marketing research firm, has obtained prescription sales data for 20 independent pharmacies (see below). In this table, the following variables are included: Sales over the past year (in units of $1,000), Floor space (square feet), Percentage of floor space dedicated to the pharmacy (square feet), Number of parking spaces available to the store, Weekly per capita income for the surrounding community (in units of $100), and whether the pharmacy is located in a shopping center (coded 1) or otherwise (coded 0). The marketing firm has asked you to determine what predicts sales in these independent pharmacies. (25 points)
a. What is the most powerful and appropriate statistic to answer the marketing firm's inquiry?
b. Calculate a correlation matrix for these variables. What variables are significantly related to the outcome variable?
c. Calculate the appropriate statistical analysis. What predictors are in your model? What is the outcome variable?
d. Test various models and write the equation for the model that has the best fit.
e. What is the R2 value for this model? Interpret this value.
f. What is the adjusted R2 value for this model? Interpret this value.
The solution provides a step by step method for regression analysis. Formulas for the calculation and interpretations of the results are also included.