A beverage company specializing in sales of champagne reports four years of quarterly sales as follows (in millions of $):

Quarter Sales ($ M)

1 ............12

2 ............41

3 ............15

4 ............48

5 ............25

6 ............55

7 ............23

8 ............69

9 ............51

10 .............80

11 .............54

12 .............87

13 .............64

14 .............94

15 .............62

16 ............. 108

The regression equation is Predicted Sales = 14.15 + 4.87 Quarter.

a) Find the residuals.

b) Plot the residuals against Quarter.

c) Compute the Durbin-Watson statistic.

d) At α = 0.05, what are the values of dL and dU?

e) Is there evidence of positive autocorrelation? Explain.

f) Is there evidence of negative autocorrelation? Explain.