A research company has been hired by a realty company to do an - 6741

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A research company has been hired by a realty company to do an analysis of heating cost of homes in the region. The realty company wanted to be able to predict the heating cost of a typical single-family home. The realty company was constantly being asked questions regarding heating costs by potential home buyers. It was believed that these variables would impact heating costs (Y'): mean daily outdoor temperature (X1), the number of inches of insulation (X2), and the age in years of the furnace (X3). The multiple regression analysis produced the following regression equation: Y' = 427.2 – 4.58X1 – 14.83X2 + 6.10X3. Which statement is correct based on this analysis? 

 A.  The age of the furnace has an indirect relationship with heating costs. 

 B.  There is an inverse relationship between outdoor temperature and heating costs. 

 C.  There is no real clear relationship between these variables. 

 D.  There exists a direct relationship between inches of insulation and heating costs. 

 
Solution Description

A research company has been hired by a realty company to do an analysis of heating cost of homes in the region. The realty company wanted to be able to predict the heating cost of a typical single-family home. The realty company was constantly being asked questions regarding heating costs by pote