AT&T; , 11:25 AM Meme ECO578 Fall 2017 53) The Acme corp. wished to predict main

Question

AT&T; , 11:25 AM Meme ECO578 Fall 2017 53) The Acme corp. wished to predict maintenance costs per year on its factory equipment by knowledge of the equipment's age. The following data was collected which yielded the regression equation: (see the printout) SUMMARY OUTPUT Statistics Mutiple R R Square Adusted0843041 Adjusted R Square Standard0790722 Emor MS 1394491 16.1133 0.027751 Residual 3 2596288 88542 88 158 095 299 9618 0 52705 0 634845 1112 71 796 5172-111271 796 5172 920 1810 230 400 1260 a) What is the point estimate of maintenance cost for a machine that is 3 years old? given below

Explanation / Answer

(a) Here the point estimate of maintainance cost for a machine that is 3 years old.

Regression equation y^ = -158.095 + 235.2381x

at x = 3 years old

Point estimate E(y) = -158.095 + 235.2381 * 3 = $ 547.62

(b) Here the missing values are

Multiple R = sqrt (R square) = sqrt (0.843041) = 0.918173

Standard error = sqrt(MS) = sqrt (86542.86) = 294.1817

SS = MS * dF = 1394491 * 1 = 1394491

t stat (X variable 1) = Coefficent/ Standard error = 235.2381/ 58.50239 = 4.01414

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