A large national bank charges local companies for using thei

A large national bank charges local companies for using their services. A bank official reported the results of a regression analysis designed to predict the bank\'s charges (Y)—measured in dollars per month—for services rendered to local companies. One independent variable used to predict service charges to a company is the company\'s sales revenue (X)—measured in millions of dollars. Data for 21 companies who use the bank\'s services were used to fit the model:
Y_i = ₀ + ₁Xi + E_i

The results of the simple linear regression are provided below.

Referring to Scenario 13-1, interpret the p-value for testing whether ₁ exceeds 0.

There is insufficient evidence (at the = 0.10) to conclude that sales revenue (X) is a useful linear predictor of service charge (Y).

There is sufficient evidence (at the = 0.05) to conclude that sales revenue (X) is a useful linear predictor of service charge (Y).

Sales revenue (X) is a poor predictor of service charge (Y).

For every $1 million increase in sales revenue, you expect a service charge to increase $0.034.

= -2,700 + 20X, SYX = 65, two-tail p-value = 0.034 (for testing 1)

Solution

Since p-value is 0.034 < 0.05, we can conclude that there is sufficient evidence (at the = 0.05) to conclude that sales revenue (X) is a useful linear predictor of service charge (Y).

Hence correct Option is B