Refer to the Hyatt Place scatter plot in S6-11.
Scatter plot in S6-11

1. Would the high-low method or regression analysis result in a more accurate cost equation for the data pictured in the scatter plot? Explain.
2. A regression analysis of the data revealed an R-square figure of 0.939. Interpret this figure in light of the lowest and highest possible R-square values.
3. As a manager, would you be confident predicting utilities costs for other room-night volumes within the same relevant range?

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Number of room-nights rented and utilities cost S7,000- $6,000- $5,000- $4,000- $3,000 – $2,000- $1,000 1,500 2,500 500 1,000 2,000 3,000 3,500 Number of room-nights rented Utilities cost