A trucking company wants to predict the yearly maintenance expense (Y) for a truck using the number of miles driven during the year (X1) and the age of the truck (X2, in years) at the beginning of the year. The company has gathered the data given in the file P10_16.xlsx, where each observation corresponds to a particular truck.
a. Estimate a multiple regression equation using the given data. Interpret each of the estimated regression coefficients. Why is the magnitude of the Miles Driven coefficient so much lower than the magnitude of the Age of Truck coefficient? Is it because Miles Driven is not as important in predicting Maintenance Expense?
b. Interpret the standard error of estimate se and R2 for these data.