The owner of Maumee Ford-Mercury-Volvo wants to study the relationship between t

Question

The owner of Maumee Ford-Mercury-Volvo wants to study the relationship between the age of a car and its selling price. Listed below is a random sample of 12 used cars sold at the dealership during the last year. (a) Determine the regression equation. (Round your answers to 3 decimal places. Negative values should be indicated by a minus sign.) (b) Estimate the selling price of a 13-year-old car (in $000). (Round your answer to 3decimal places.) (c) Interpret the regression equation (in dollars). (Round your answer to nearest dollar amount.)

Explanation / Answer

Following table shows the output of regression analysis

(a)

The regression equation:

y' = 12.993 - 0.454x

That is

a = 12.993

b = -0.454

(b)

The estimated selling price for x = 13 is

y' = 12.993 - 0.454 * 13 = 7.091

(c)

Slope rounded to nearest dollar amount is b=-$0.

For each additional year, the car dereases $0 in value.

SUMMARY OUTPUT Regression Statistics Multiple R 0.526626018 R Square 0.277334963 Adjusted R Square 0.205068459 Standard Error 2.588774742 Observations 12 ANOVA df SS MS F Significance F Regression 1 25.71912 25.71912 3.837669577 0.078566911 Residual 10 67.01754667 6.701754667 Total 11 92.73666667 Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Intercept 12.99253333 2.323175935 5.592574001 0.000230049 7.816174795 18.16889187 Age, X -0.4536 0.231547052 -1.958997085 0.078566911 -0.969518981 0.062318981

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