Retail Price Data for N = 60 Hard Disk Drives $y =$

question 34

Multiple Choice

Retail price data for n = 60 hard disk drives were recently reported in a computer magazine. Three variables were recorded for each hard disk drive: $y =$ Retail PRICE (measured in dollars)
$x _ { 1 } =$ Microprocessor SPEED (measured in megahertz)
(Values in sample range from 10 to 40 )
$x _ { 2 } =$ CHIP size (measured in computer processing units)
(Values in sample range from 286 to 486 )
a first-order regression model was fit to the data. Part of the printout follows:
$$\begin{array}{lllllllll}\hline &&&\text { Dep Var }&\text {Predict }&\text {Std Err}&\text { Lower 95\%}&\text { Upper 95\% }\\ \text {OBS }&\text {SPEED }&\text {CHIP }&\text {PRICE}&\text { Value }&\text {Predict }&\text {Predict}&\text { Predict }&\text {Residual}\\1 & 33 & 286 & 5099.0 & 4464.9 & 260.768 & 3942.7 & 4987.1 & 634.1\\\hline \end{array}$$
Interpret the interval given in the printout.

• A) We are 95% confident that the price of a single hard drive with 33 megahertz speed and 386 CPU falls between $3,943 and $4,987.
• B) We are 95% confident that the price of a single hard drive falls between $3,943 and $4,987.
• C) We are 95% confident that the average price of all hard drives falls between $3,943 and $4,987.
• D) We are 95% confident that the average price of all hard drives with 33 megahertz speed and 386 CPU falls between $3,943 and $4,987.

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Definitions:

Machine Hours

A measure of the operating time of a machine, used in costing and budgeting to allocate expenses based on usage.

Units-Of-Production

A depreciation method that allocates the cost of an asset over its useful life based on the number of units it produces.

Depreciable Cost

The initial cost of an asset minus its salvage value, which is the amount that can be depreciated over the life of the asset.

Residual Value

The approximated price an asset will bring in at the conclusion of its operational life when it is sold.