Reference no: EM132709605

Your client wants to determine the relationship between its annual Repairs & Maintenance (R&M) costs and a potential cost driver (number of machine hours worked). The output of a regression analysis showed the following information:

Y-Intercept = 126,078
X Variable = 122.12
R-square = 0.2852

Problem 1: Should your client use the equation (Y = $126,078 + $122.12X) to predict next year's R & M costs?

A. Yes, because R-square is so low.
B. No, because R-square is so low.
C. Yes, because regression analysis can be relied upon.
D. There is not enough information to make this prediction.