Chapter 13, Problem 13.7AC

Jensen Tire & Auto is deciding whether to purchase a maintenance contract for its newcomputer wheel alignment and balancing machine. Managers feel that maintenance expenseshould be related to usage, and they collected the following information on weeklyusage (hours) and annual maintenance expense (in hundreds of dollars). a. Develop a scatter chart with weekly usage hours as the independent variable. Whatdoes the scatter chart indicate about the relationship between weekly usage and annualmaintenance expense?b. Use the data to develop an estimated regression equation that could be used to predictthe annual maintenance expense for a given number of hours of weekly usage. Whatis the estimated regression model? c. Test whether each of the regression parameters b0 and b1 is equal to zero at a 0.05level of significance. What are the correct interpretations of the estimated regressionparameters? Are these interpretations reasonable?d. How much of the variation in the sample values of…