Jensen Tire & Auto is in the process of deciding whether to purchase a maintenance contract for its new computer wheel alignment and balancing machine. Managers feel that maintenance expense should be...

Q8

Extracted text: Jensen Tire & Auto is in the process of deciding whether to purchase a maintenance contract for its new computer wheel alignment and balancing machine. Managers feel that maintenance expense should be related to usage, and they collected the following information on weekly usage (hours) and annual maintenance expense (in hundreds of dollars). Weekly Usage Annual (hours) Maintenance Expense 16 20 13 25 23 33 31 40 35 50 20 34 27 36 34 42 43 55 41 43 a. Develop the estimated regression equation that relates annual maintenance expense (in hundreds of dollars) to weekly usage hours (to 3 decimals). Expense + Weekly Usage b. Test the significance of the relationship in part (a) at a 0.05 level of significance. Compute the value of the F test statistic (to 2 decimals). The value is less than 0.01 What is your conclusion? Conclude that there is a significant relationship between expense and weekly usage c. Jensen expects the new machine to be used 30 hours per week. What is the expected annual maintenance expense in hundreds of dollars (to 2 decimals)? hundred Develop a 95% prediction interval for the company's annual maintenance expense for this machine (to 2 decimals). ( $ hundred, $ hundred )