Explanation

The proportion of sales growth explained by the regression results is measured by the R-squared (R²) statistic, which is calculated as:

$R^2 = \frac{SSR}{SST}$

Where:

• SSR = Sum of Squared Regression = 869.76
• SST = Total Sum of Squares = SSR + SSE
• SSE = Sum of Squared Errors = 22.12

First, calculate SST: $SST = SSR + SSE = 869.76 + 22.12 = 891.88$

Now calculate R²: $R^2 = \frac{869.76}{891.88} = 0.975 \approx 0.98$

This means that 98% of the variation in sales growth is explained by the three factors in the regression model (X₁, X₂, and X₃).

Interpretation:

• R² = 0.98 indicates a very strong relationship between the independent variables and the dependent variable
• Only 2% of the variation in sales growth remains unexplained by the model
• This suggests the regression model provides an excellent fit for the data

Therefore, the correct answer is B. 0.98.