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 (hours)	Annual Maintenance Expense ($100s)
13	17.0
10	22.0
20	30.0
28	37.0
32	47.0
17	30.5
24	32.5
31	39.0
40	51.5
38	40.0

(a)

Choose a scatter chart below with weekly usage as the independent variable.

(i)
(ii)
(iii)
(iv)

	What does the scatter chart indicate about the relationship between weekly usage and annual maintenance expense?
	The scatter chart indicates there may be a

linear relationship between weekly usage and annual maintenance expense. Annual maintenance expense is expected to increase as weekly usage increases, and this scatter chart is consistent with what would be expected.
(b)	Use the data to develop an estimated regression equation that could be used to predict the annual maintenance expense for a given number of hours of weekly usage. What is the estimated regression model?
	Let x represent the number of hours of weekly usage.
	If required, round your answers to two decimal places. For subtractive or negative numbers use a minus sign even if there is a + sign before the blank. (Example: -300)
	= + x
(c)	Test whether each of the regression parameters 0 and 1 is equal to zero at a 0.05 level of significance. What are the correct interpretations of the estimated regression parameters? Are these interpretations reasonable?
	The input in the box below will not be graded, but may be reviewed and considered by your instructor.
(d)	How much of the variation in the sample values of annual maintenance cost does the model you estimated in part (b) explain?
	If required, round your answer to two decimal places. Do not round intermediate calculations.
	%
(e)	If the maintenance contract costs $3000 per year, would you recommend purchasing it?

	Explain.
	The input in the box below will not be graded, but may be reviewed and considered by your instructor.