Assume that Fourth Street Floral does a regression analysis on the next year's data using Excel. The output generated by Excel is as follows:

Requirements
1. Determine the firm's cost equation (use the output from the Excel regression).
2. Determine the R-square (use the output from the Excel regression). What does Fourth Street Floral R-square indicate?
3. Predict van operating costs at a volume of 15,000 miles assuming the company would use the cost equation from the Excel regression regardless of its R-square. Should the company rely on this cost estimate? Why or why not?

SUMMARY OUTPUT Regression Statistics 3 Multiple R R Square 5 Adjusted R Square Standard Error 7 Observations 8 ANOVA 0.95 0.90 0.87 124.99 Significance F df SS 668,089.58 78,110.42 746,200.00 MS 668,089.58 15,622.08 9. 10 Regression Residual Total 42.77 0.0013 11 12 13 14 Standard Upper 95% 2,676.33 Lower t Stat Coefficients 931.23 P-value or 15 95% -813.87 16 Intercept 17 X Variable 1 678.87 1.37 0.23 0.28 0.04 6.54 0.00 0.17 0.39 18