Question
A large national bank charges local companies for using their services. A bank official reported the results of a regression to predict the bank charges
A large national bank charges local companies for using their services. A bank official reported the results of a regression to predict the bank charges (Y) -- measured in dollars per month-- for services rendered to local companies. One independent variable used to predict service charges is the company's sales revenue (X) -- measured in millions of dollars. Data for 21 companies who use the bank's services were used to fit the simple linear regression model and the results are provided below:
Y-hat = -2,700 + 20X
two tail p value = .034
Interpret the p value if alpha is equal to .05.
A. There is sufficient evidence to conclude that sales revenue is a useful linear predictor of service charge
B. There is insufficient evidence to conclude that sales revenue is a useful linear predictor of service charge
C. Sales revenue is a poor predictor of service charge
D. For every 1 million increase in revenue, you expect the service charge to increase .034
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