The Dean of the College of Business at Tech University has initiated a fundraising campaign. One of the selling points she plans to use with potential donors is that increasing the college€™s private endowment will improve its ranking among international business schools as published in various news magazines. She would like to demonstrate that there is a relationship between funding and the rankings. She has collected the following data showing the private endowments ($ millions), and annual budgets ($ millions) from provincial and private sources, for eight of Tech€™s peer institutions plus Tech, and the ranking of each school.

a. Use Excel to develop a linear regression model for the amount of the private endowment and the ranking, and forecast a ranking for a private endowment of $70 million. Does there appear to be a strong relationship between the endowment and ranking?

b. Using Excel, develop a multiple regression equation for all of these data including private endowment and annual budget, and forecast a ranking for a private endowment of $70 million and an annual budget of $40 million. How does this forecast compare to the forecast in part (a)?

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Private Annual Endowment Budget Ranking 2.5 8.1 87 52.0 26.0 20 7.5 12.7 122 63.0 33.0 32 46.0 12.0 54 27.1 16.1 76 23.3 17.0 103 46.4 14.9 40 21.8 48.9 98