Lawson Advertising Agency is trying to persuade Kansas City Sailboards Company to spend more on advertising. The agency’s argument is that a constant and strong positive relationship exists between advertising and sales in the sailboard industry. Sue Lawson presents these data taken from industry data for stores similar in size and market share to Kansas City Sailboards:

Advertising Expense                Annual Sales
$2,500...................................................$ 96,000
3,000......................................................110,000
3,500......................................................124,000
4,000......................................................138,000
4,500......................................................143,000
5,000......................................................147,000
5,500......................................................150,000

Required

1. Use the high-low method to estimate the relationship between increased advertising and sales.

2. Graph annual sales and advertising expense.

3. Do the data prove Sue’s point?