The cost of a used car is highly correlated with the following variables: 

Using regression analysis, the following relationship between the cost of a car and the four independent variables was found.

a. Plot the purchase cost as a function of the four variables. 

b. Which variable has the greatest effect on cost? 

c. You have a total of $5,000. List the different types of cars (combinations of the parameters) that you can afford. 

d. Develop a model by which you select the best car for your needs. 

e. Operations and maintenance costs for the car are estimated as follows:

Where s is the number of miles driven annually. What is the best car (combination of parameters) for a person who drives 12,000 miles every year? 

Transcribed Image Text:

t = age of the car V = volume of engine D A = = number of doors accessories and style 1 t 5 (years) 1,000 V 2,500 (cubic centimeters) D = 2, 3, 4, 5 A = 1, 2, 3, 4, 5, 6 (qualitative)