Question: Use the information provided below to answer questions 18 - 20. An organisational researcher is interested in establishing whether the average monthly salary of the
Use the information provided below to answer questions 18 - 20.
An organisational researcher is interested in establishing whether the average monthly salary of the employees of a firm is a predictor of the annual operating profit of the firm. The table below shows the average monthly salaries of employees of, and the annual operating profits (in R millions) of, 12 firms in the information technology sector in a Southern African country.
| Firm | Average monthly salary of employees, R | Annual operating profit of the firm, R m |
| 1 | 9 000 | 12 |
| 2 | 12 000 | 18 |
| 3 | 15 000 | 21 |
| 4 | 11 000 | 15 |
| 5 | 8 000 | 13 |
| 6 | 10 000 | 12 |
| 7 | 13 000 | 15 |
| 8 | 14 000 | 19 |
| 9 | 11 500 | 16 |
| 10 | 9 500 | 11 |
| 11 | 12 600 | 14 |
| 12 | 16 000 | 20 |
18. Determine the Pearson's correlation coefficient of the relationship between the average monthly salaries of employees of the firms and the annual operating profits of the firms.
A 0.8754
B 0.7663
C 0.6798
D 0.9332
19. Determine the trend equation of the relationship between the average monthly salaries of employees of the firms and the annual operating profits of the firms.
A. y = 1 000 000 - 1191.6x
B. y = 1 000 000x + 1191.6
C. y = 1 000 000 + 1191.6x
D. y = 1 000 000x - 1191.6
20. Using the trend equation of the relationship between the average salaries of the employees at a firm and the operating profit of the firm, estimate the annual operating profit of an information technology firm in the Southern African country if the average monthly salary of the employees of the firm is R10 000.
A. R18 536 000
B. R12 916 000
C. R13 387 000
D. R14 577 000
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