Slope of the regression model

Reference no: EM1314438

The following data represent a company's yearly sales volume and its advertising expenditure over a period of 8 years.

(Y) Sales in Millions of Dollars	(X) Advertising in ($10,000)
15	32
16	33
18	35
17	34
16	36
19	37
19	39
24	42

a. Develop a scatter diagram of sales versus advertising and explain what it shows regarding the relationship between sales and advertising.

b. Use the method of least squares to compute an estimated regression line between sales and advertising.

c. If the company's advertising expenditure is $400,000, what are the predicted sales? Give the answer in dollars.

d. What does the slope of the estimated regression line indicate?

e. Compute the coefficient of determination and fully interpret its meaning.

f. Use the t test to determine whether the slope of the regression model is significant at α = 0.05.

g. Develop a 95% confidence interval for predicting the average sales for the years when $400,000 was spent on advertising.

h. Compute the correlation coefficient.

Reference no: EM1314438

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