Jensen Tire & Auto is in the process of deciding whether topurchase a maintenance contract for its new computer wheelalignment and balancing machine. Managers feel that maintenanceexpense should be related to usage, and they collected thefollowing information on weekly usage (hours) and annualmaintenance expense (in hundreds of dollars). Weekly Usage (hours)Annual Maintenance Expense 20 23 17 28 27 36 35 43 39 53 24 37 3139 38 45 47 58 45 46 Develop the estimated regression equation thatrelates annual maintenance expense (in hundreds of dollars) toweekly usage hours (to 3 decimals). Expense = + Weekly Usage Testthe significance of the relationship in part (a) at a .05 level ofsignificance. Compute the value of the F test statistic (to 2decimals). The p value is What is your conclusion? Jensen expectsthe new machine to be used 30 hours per week. What is the expectedannual maintenance expense in hundreds of dollars (to 2 decimals)?Develop a 95% prediction interval for the company's annualmaintenance expense for this machine (to 2 decimals). ( , ) If themaintenance contract costs $3000 per year, would you recommendpurchasing the contract for the new machine in part (c)?
