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a:
Calculate the coefficient.
a:
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Explanation of Solution
The value of coefficient (b1) can be calculated as follows:
The value of coefficient is 2.47.
The intercept (b0) value can be calculated as follows:
The value of intercept is 115.24.
The general regression equation can be written as follows:
The terms
Thus, the sample regression equation can be written as follows:
b:
Interpretation.
b:
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Explanation of Solution
The coefficient indicates that increasing one unit of independent variable (month of age) leads to increase in the dependent variable (repair cost) by 2.47. The value of intercept (b0) is 115.24.
c:
Coefficient of determination.
c:
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Explanation of Solution
Coefficient of determination i
The coefficient for the determination is 0.5659. The R2 value indicates that 56.59% of the variation in the dependent variable is explained by the independent variable.
d:
Testing the hypothesis.
d:
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Explanation of Solution
Error sum of square (SSE) can be calculated as follows:
Error sum of square is 33,777.
The value of
The value of
Null hypothesis (H0) is
The t table value can be calculated as follows:
The t table value is 2.101.
The value of
The value of
Calculated t value can be obtained as follows:
The t-value is 4.84. Since the calculated t-value is greater than the t table value, the alternate hypothesis is accepted.
e:
Calculate the lower and the upper class limit.
e:
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Explanation of Solution
The estimated value of y
The estimated value of y is 411.64.
Prediction interval (PI) of sales can be calculated as follows:
The lower class limit is 318.1 and the upper class limit is 505.2.
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Chapter 16 Solutions
Statistics for Management and Economics (Book Only)
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