Your client's company wants to determine the relationship between its monthly operating costs and a potential cost driver.The output of regression analysis showed the following information:
Intercept Coefficient = 75,828
X Variable 1 Coefficient = 52.61
R-square = 0.9756
Should your client use this information to predict monthly operating costs?
A)No,because R-square is so high.
B)Yes,because R-square is so high.
C)Yes,because regression analysis can be relied upon.
D)There is not enough information to make this prediction.

Question

Quizplus · Accepted Answer

The high R-square value indicates that the regression model fits well and can be relied upon to predict monthly operating costs based on the identified cost driver. Therefore, the client can use the information to predict monthly operating costs.

Your Client's Company Wants to Determine the Relationship Between Its