A company is interested in studying the relationship between advertising expenses and sales revenue. The company has
Question:
A company is interested in studying the relationship between advertising expenses and sales revenue. The company has collected data on advertising expenses (in thousands of dollars) and sales revenue (in millions of dollars) for 20 different products. The following table summarizes the data:
Product | Advertising Expense | Sales Revenue |
---|---|---|
1 | 2.5 | 8.1 |
2 | 3.7 | 10.3 |
3 | 2.2 | 7.9 |
4 | 4.3 | 12.1 |
5 | 2.8 | 9.2 |
6 | 3.6 | 11.2 |
7 | 1.9 | 7.5 |
8 | 4.1 | 12.6 |
9 | 2.9 | 9.5 |
10 | 3.4 | 10.4 |
11 | 2.7 | 9.1 |
12 | 3.9 | 11.7 |
13 | 2.1 | 7.8 |
14 | 4.2 | 12.3 |
15 | 3.1 | 10.0 |
16 | 3.3 | 10.8 |
17 | 2.6 | 8.8 |
18 | 3.8 | 11.8 |
19 | 2.4 | 8.2 |
20 | 3.5 | 10.6 |
a) Calculate the correlation coefficient between advertising expenses and sales revenue.
b) Test if there is a significant linear relationship between advertising expenses and sales revenue using a 5% significance level.
c) Calculate the equation of the regression line and interpret the slope coefficient.
d) Estimate the sales revenue for a product that has an advertising expense of $3,000.
Statistics For Business And Economics
ISBN: 9780132745659
8th Edition
Authors: Paul Newbold, William Carlson, Betty Thorne