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

question 371

Multiple Choice

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 = 89,620
X Variable 1 Coefficient = 62.53
R-square = 0.9852
Should your client use this information to predict monthly operating costs?

• A) Yes, because R-square is so high.
• B) No, 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.