Auto Rental News has reported U.S. operations data for 15 top rental-car companies. Using data file XR17016, with y 5 rental revenue (millions of dollars), x1 5 thousands of cars in service, and x2 5 number of rental locations: Source: Wall Street Journal Almanac 1999, p. 649.

a. Fit a first-order model of the form E(y) 5 0 1 1x1 1 2x2. Interpret the R2 value for the model and indicate whether, at the 0.01 level, the model is significant.

b. Repeat part (a), but with an interaction term included. Interpreting the R2 value, to what extent has inclusion of the interaction term improved the model’s explanatory power?