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).
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).
Glencoe Algebra 1, Student Edition, 9780079039897, 0079039898, 2018
18th Edition
ISBN:9780079039897
Author:Carter
Publisher:Carter
Chapter10: Statistics
Section10.6: Summarizing Categorical Data
Problem 25PPS
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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 |
---|---|
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 |
test statistic is 6.90
Find the p-value. (Round your answer to three decimal places.)
p-value =
State your conclusion.
Reject H0. We conclude that the relationship between weekly usage (hours) and annual maintenance expense (in hundreds of dollars) is significant.
Do not reject H0. We conclude that the relationship between weekly usage (hours) and annual maintenance expense (in hundreds of dollars) is significant.
Reject H0. We cannot conclude that the relationship between weekly usage (hours) and annual maintenance expense (in hundreds of dollars) is significant.
Do not reject H0. We cannot conclude that the relationship between weekly usage (hours) and annual maintenance expense (in hundreds of dollars) is significant.
(c)
Jensen expects to use the new machine 25 hours per week. Develop a 95% prediction interval for the company's annual maintenance expense (in hundreds of dollars). (Round your answers to two decimal places.)
$ hundred to $ hundred
(d)
If the maintenance contract costs $2,800 per year, would you recommend purchasing it? Why or why not? (Round your answer to two decimal places.)
The expected expense of a machine being used 25 hours per week is $ ( ) hundred. Since this expected expense is ---Select--- less or greater than the cost of the maintenance contract, the maintenance contract ---Select--- is not or is advisable.
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