An accounting firm that specializes in auditing mining companies collected the data found in the file Dat9-6.xls on your data disk describing the long-term assets and long-term debt of its 12 clients.

a. Prepare a scatter plot of the data. Does there appear to be a linear relationship between these variables?

b. Develop a simple linear regression model that can be used to predict long-term debt from long-term assets. What is the estimated regression equation?

c. Interpret the value of R2.

d. Suppose that the accounting firm has a client with total assets of $50,000,000. Construct an approximate 95% confidence interval for the amount of long-term debt that the firm expects this client to have.