Regression Analysis Tour Jamaica is trying to ascertain if there was a relationship between the number of accidents involving its fleet of buses each month and the amount paid for directors remuneration. Data for the past five months were as follows MONTH # of ACCIDENTS AMOUNT SPENT FOR DIRECTORS REMUNERATION $ 000s August 12 40 September 4 40 October 8 40 November 10 40 December 15 40 Required

a. Using a regression analysis model, determine the fixed cost, the variable cost , and hence the total cost formula.

b. Calculate the correlation coefficient ( r ). Explain the relationship between the number of accidents and the amount spent for directors remuneration. What have you noticed between the value of the variable cost and the value of the correlation coefficient?

c. Calculate the expected amount to be spent in January if the company anticipates 6 accidents