$339,380 $41,768 A national homebuilder builds single-family homes and condominium-style townhouses. The accompanying dataset provides information on the selling price, lot cost, and type of home for closings during one month. Complete parts a through c. E Click the icon to view the house sales data a. Develop a multiple regression model for sales price as a function of lot cost and type of home without any interaction term. Create a dummy variable named "Townhouse", where it is equal to 1 when Type = "Townhouse" and 0 otherwise. Determine the coefficients of the regression equation. Sales Price = 108726 + (3.68 ) • Lot Cost + ( - 75063 )• Townhouse (Round the constant and coefficient of Townhouse to the nearest integer as needed. Round all other values to two decimal places as needed.) b. Determine if an interaction exists between lot cost and type of home and find the best model. Use a = 0.1 as the level of significance. First determine whether an interaction exists. Select the correct choice below and, if necessary, fill in the answer box to complete your choice. O A. An interaction exists because the p-value of the variable Lot Cost • Townhouse is, which is less than a. (Type an integer or a decimal rounded to three decimal places as needed.) O B. An interaction exists because the p-value of the variable Townhouse is which is greater than a (Type an integer or a decimal rounded to three decimal places as needed.) O C. An interaction exists because the p-value of the variable Lot Cost is which is greater than a (Type an integer or a decimal rounded to three decimal places as needed.) O D. No interaction exists because the p-value is less than a for all of the independent variables. House sales data Туре Townhouse Sales Price Lot Cost Single Family Townhouse Single Family $114,740 $138,530 $149,905 $172,000 $183,916 $189,390 $21,700 $26,550 $25,550 $26.200 $46,025 Townhouse Townhouse $28,000 S36.000 Single Family Townhouse $191,120 $198,898 $205,076 $207,821 $216,205 $36,000 $46,025 $46,025 S40 209 Townhouse Family Famile Single Single $40,299 $37,500 $252,800 $257,000 $270,000 $270,500 $273,105 $74,400 $44,198 $44,344 Single Family Family Single Family Single Family Single Family Single Family Single Family Single Family Single Faniny Single $42,099 $46,000 $45,650 $279,720 296 $296,990 $303.500 $58 000 $60.000 $46.850 $309,487 $314,898 $321,602 $326.412 Family Single Family Single $83.300 $63.523 $71.449 Family Single Family Single Family Single Family Single Family Single Family Single Family Single Family $339.374 $50.150 S50, 150 $55.850 $340.065 $356.117 $361,949 $57.219 $51,591 $58,422 $434,426 $494,820 $85,122 Print Done

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I need help with question B. I need to know which option to choose from A-D and what number to put in the box of the selection. Note: the answer for question a is already confirmed as correct.

### Understanding the Relationship Between Sales Price, Lot Cost, and Home Type

A national homebuilder develops single-family homes and condominium-style townhouses. The dataset provides insights into the selling price, lot cost, and type of home for various closings. Here’s how to analyze this data through regression modeling.

#### Objectives:

1. **Develop a Multiple Regression Model:**
   - **Dependent Variable:** Sales price.
   - **Independent Variables:** Lot cost and home type.
   - Create a dummy variable—`Townhouse`—set to 1 when the home is a townhouse, and 0 otherwise.

   ##### Regression Equation:
   \[
   \text{Sales Price} = 108726 + (3.68) \times \text{Townhouse} + \text{Lot Cost} - (75063) \times \text{Townhouse}
   \]
   - Coefficients are rounded to their nearest integers/whole numbers as specified.

2. **Determine Interaction Between Lot Cost and Home Type:**
   - Use \(\alpha = 0.1\) as the significance level to assess the best model fit.

   #### Choices for Interaction Assessment:
   - **A.** Interaction exists if the p-value for `Lot Cost * Townhouse` is less than α.
   - **B.** Interaction exists if the p-value for `Townhouse` is greater than α.
   - **C.** Interaction exists if the p-value for `Lot Cost` is greater than α.
   - **D.** No interaction if the p-values exceed α for all variables.

#### Data Overview:

The dataset lists various properties categorized by type with corresponding sales prices and lot costs:

| Type           | Sales Price | Lot Cost |
|----------------|-------------|----------|
| Townhouse      | $114,740    | $21,700  |
| Single Family  | $138,530    | $26,550  |
| Townhouse      | $149,905    | $25,550  |
| Single Family  | $172,000    | $26,200  |
| Townhouse      | $183,916    | $46,025  |
| Townhouse      | $189,390    | $28,000  |
| Single Family  | $191,120    | $36,000  |
| Townhouse      | $195,892    | $46,025  |
Transcribed Image Text:### Understanding the Relationship Between Sales Price, Lot Cost, and Home Type A national homebuilder develops single-family homes and condominium-style townhouses. The dataset provides insights into the selling price, lot cost, and type of home for various closings. Here’s how to analyze this data through regression modeling. #### Objectives: 1. **Develop a Multiple Regression Model:** - **Dependent Variable:** Sales price. - **Independent Variables:** Lot cost and home type. - Create a dummy variable—`Townhouse`—set to 1 when the home is a townhouse, and 0 otherwise. ##### Regression Equation: \[ \text{Sales Price} = 108726 + (3.68) \times \text{Townhouse} + \text{Lot Cost} - (75063) \times \text{Townhouse} \] - Coefficients are rounded to their nearest integers/whole numbers as specified. 2. **Determine Interaction Between Lot Cost and Home Type:** - Use \(\alpha = 0.1\) as the significance level to assess the best model fit. #### Choices for Interaction Assessment: - **A.** Interaction exists if the p-value for `Lot Cost * Townhouse` is less than α. - **B.** Interaction exists if the p-value for `Townhouse` is greater than α. - **C.** Interaction exists if the p-value for `Lot Cost` is greater than α. - **D.** No interaction if the p-values exceed α for all variables. #### Data Overview: The dataset lists various properties categorized by type with corresponding sales prices and lot costs: | Type | Sales Price | Lot Cost | |----------------|-------------|----------| | Townhouse | $114,740 | $21,700 | | Single Family | $138,530 | $26,550 | | Townhouse | $149,905 | $25,550 | | Single Family | $172,000 | $26,200 | | Townhouse | $183,916 | $46,025 | | Townhouse | $189,390 | $28,000 | | Single Family | $191,120 | $36,000 | | Townhouse | $195,892 | $46,025 |
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