Lab $5\mathrm{.}2$ Excel: Evaluating the Relationship Between Sales and R&D Expenditures: TesLab $5\mathrm{.}2$ Excel: Evaluating the Relationship Between Sales and R&D Expenditures: Testing for a Nonlinear Relationship

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Keywords: Research and Development $($R&D$)$ Expenditures, Sales Revenue, Regression

Decision$-$Making Context: Research and development $($R&D$)$ expenditures are investments that companies make to create new insights and new products that customers might like. Over time, these investments may pay off in the form of increased revenues and profits.

In Lab $5\mathrm{.}1,$ you determined whether there is linear relationship between revenues and R&D expenditures. This lab goes a step further to determine whether the relationship is nonlinear. We test for nonlinearity by adding an additional term, R&D expenditures squared, or $($R&D expenditures$)2.$

Companies can run a regression to understand the relationship between sales revenue and R&D expenditures. The outcome variable is sales revenue, which arguably results from changes in the input variable, R&D expenditures.

Dependent variable: Sales revenue

Independent variable: R&D expenditures, $($R&D expenditures$)2$

Access the text alternative for Lab $5-2$ Excel. Will open in a new tab or window. Internet connection required.

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Required:

Using regression analysis, determine the relationship between R&D expenditures, R&D expenditures squared, and sales revenue.

Data: Lab $5\mathrm{.}2$ Data.xlsx

Specify the Question: Is there a nonlinear relationship between R&D expenditures and sales revenue?

Obtain the Data: Open Excel file Lab $5\mathrm{.}2$ Data.xlsx and browse around a bit to familiarize yourself with the data.

Analyze the Data: Refer to lab $5\mathrm{.}2$ in your text for additional instructions and steps.

Lab $5\mathrm{.}2$ Excel Part $1$: Assessment Questions

Answer the following questions based on the details computed.

Note: Round the adjusted R$-$squared value to $1$ decimal place.ting for a Nonlinear Relationship

Skip to question

$[$The following information applies to the questions displayed below.$]$

Keywords: Research and Development $($R&D$)$ Expenditures, Sales Revenue, Regression

Decision$-$Making Context: Research and development $($R&D$)$ expenditures are investments that companies make to create new insights and new products that customers might like. Over time, these investments may pay off in the form of increased revenues and profits.

In Lab $5\mathrm{.}1,$ you determined whether there is linear relationship between revenues and R&D expenditures. This lab goes a step further to determine whether the relationship is nonlinear. We test for nonlinearity by adding an additional term, R&D expenditures squared, or $($R&D expenditures$)2.$

Companies can run a regression to understand the relationship between sales revenue and R&D expenditures. The outcome variable is sales revenue, which arguably results from changes in the input variable, R&D expenditures.

Dependent variable: Sales revenue

Independent variable: R&D expenditures, $($R&D expenditures$)2$

Access the text alternative for Lab $5-2$ Excel. Will open in a new tab or window. Internet connection required.

$-0$:$00$

$1$x

Required:

Using regression analysis, determine the relationship between R&D expenditures, R&D expenditures squared, and sales revenue.

Data: Lab $5\mathrm{.}2$ Data.xlsx

Specify the Question: Is there a nonlinear relationship between R&D expenditures and sales revenue?

Obtain the Data: Open Excel file Lab $5\mathrm{.}2$ Data.xlsx and browse around a bit to familiarize yourself with the data.

Analyze the Data: Refer to lab $5\mathrm{.}2$ in your text for additional instructions and steps.

Lab $5\mathrm{.}2$ Excel Part $1$: Assessment Questions

Answer the following questions based on the details computed.

Note: Round the adjusted R$-$squared value to $1$ decimal place.