Using the least-squares regression method, the estimate of the fixed component of maintenance cost per month is closest to:
A)$6,066
B)$7,244
C)$5,944
D)$7,130

Question

Quizplus · Accepted Answer

The least-squares regression method calculates the fixed component (intercept) of a cost function by minimizing the sum of the squares of the differences between observed and estimated values. Based on the given options, $6,066 is the closest estimate for the fixed component.

Using the Least-Squares Regression Method, the Estimate of the Fixed