Question

Dun & Bradstreet reports, among other things, information about new business incorporations and number of business failures over several years. Shown here are data on business failures and current liabilities of the failing companies over several years. Use these data and the following model to predict current liabilities of the failing companies by the number of business failures. Discuss the strength of the model.


Now develop a different regression model by recoding x. Use Tukey’s four-quadrant approach as a resource. Compare your models.

Rate of Business Current Liabilities
Failures of Failing Companies
(10,000) .... ($ millions)
44 ...... 1,888
43 ....... 4,380
42 ...... 4,635
61 ...... 6,955
88 ...... 15,611
110 ...... 16,073
107 ...... 29,269
115 ...... 36,937
120 ...... 44,724
102 ...... 34,724
98 ...... 39,126
65...... 44,261


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  • CreatedFebruary 19, 2015
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