A company uses regression analysis to forecast maintenance costs. The regression output is: Y = $50,000 + $2.50X, where Y is total maintenance cost and X is machine hours. The R-squared value is 0.85. If the company expects to operate 40,000 machine hours next month, which of the following statements is correct?

The forecasted cost is $100,000, and the model explains 15% of the variability.

The forecasted cost is $150,000, and the model is not reliable because R-squared is less than 0.90.

The forecasted cost is $150,000, and the independent variable (machine hours) explains 85% of the variation in maintenance costs.

The forecasted cost is $100,000, and the coefficient of correlation is 0.85.