# Question: Companies in the U S car rental market vary greatly in

Companies in the U.S. car rental market vary greatly in terms of the size of the fleet, the number of locations, and annual revenue. In 2011, Hertz had 320,000 cars in service and annual revenue of approximately $4.2 billion. The following data show the number of cars in service (1000s) and the annual revenue ($millions) for six smaller car rental companies (Auto Rental News website, August 7, 2012).

a. Develop a scatter diagram with the number of cars in service as the independent variable.

b. What does the scatter diagram developed in part (a) indicate about the relationship between the two variables?

c. Use the least squares method to develop the estimated regression equation.

d. For every additional car placed in service, estimate how much annual revenue will change.

e. Fox Rent-A-Car has 11,000 cars in service. Use the estimated regression equation developed in part (c) to predict annual revenue for FoxRent-A-Car.

a. Develop a scatter diagram with the number of cars in service as the independent variable.

b. What does the scatter diagram developed in part (a) indicate about the relationship between the two variables?

c. Use the least squares method to develop the estimated regression equation.

d. For every additional car placed in service, estimate how much annual revenue will change.

e. Fox Rent-A-Car has 11,000 cars in service. Use the estimated regression equation developed in part (c) to predict annual revenue for FoxRent-A-Car.

**View Solution:**## Answer to relevant Questions

On March 31, 2009, Ford Motor Company’s shares were trading at a 26-year low of $2.63. Ford’s board of directors gave the CEO a grant of options and restricted shares with an estimated value of $16 million. On April 26, ...The data from exercise 1 follow.The estimated regression equation for these data is y = .20 + 2.60x.a. Compute SSE, SST, and SSR using equations (12.8), (12.9), and (12.10).b. Compute the coefficient of determination r2. ...The data from exercise 2 follow.a. Compute the mean square error using equation (12.15).b. Compute the standard error of the estimate using equation (12.16).c. Compute the estimated standard deviation of b1 using equation ...The data from exercise 3 follow.Develop the 95% confidence and prediction intervals when x = 12. Explain why these two intervals aredifferent.Given are data for two variables, x and y.a. Develop an estimated regression equation for these data.b. Compute the residuals.c. Develop a plot of the residuals against the independent variable x. Do the assumptions about ...Post your question