predict sale ($thousands) y based on living space in the house (square feet) (denoted as x1) and whether the house has a fireplace (denoted as x2) and house type, three levels, colonial, ranch, and other. we created two dummy variables, x3 and x4, for the categorical variable, house type. x3 equals 1 if house type is colonial, 0 otherwise; x4 equals 1 if house type is ranch, 0 otherwise. the following is the regression results in excel.