Computing for the Pearson r value and testing its significance

Compute the Pearson r value of the following data. Interpret the result. Test for the significance of the Pearson r value using 5% level of significance. A corporation owns several companies. The strategic planner of the corporation believes that amount spent on advertising is significantly related to total sales. As an aid in long-term planning, he gathers the following sales and advertising expenditures from several of the companies for 2009 (Php million).

Advertising Expenditures	Sales
10.5 18.1 12.6 4.7 21.8 60.4 37.6 6.3 17.8 43.2	130 250 148 55 338 994 541 89 125 370

Developing simple regression equation, interpreting and predicting

A corporation owns several companies. The strategic planner of the corporation believes that amount spent on advertising can to some extent be a predictor of total sales. As an aid in long-term planning, he gathers the following sales and advertising expenditures from several of the companies for 2009 (Php million).

Advertising Expenditures	Sales
10.5 18.1 12.6 4.7 21.8 60.4 37.6 6.3 17.8 43.2	130 250 148 55 338 994 541 89 125 370

Develop the simple regression equation to predict sales from advertising expenditures. Interpret the model. Predict the total sales of a company who will be spending P35 million for advertisement this year.