The following data show the advertising expenses (expressed as a percentage of total expenses) and the net operating profits (expressed as a percentage of total sales) in a random sample of six drugstores:

(a) Fit a least squares line that will enable us to predict net operating profits in terms of advertising expenses.
(b) Test the null hypothesis α = 0.8 against the alternative hypothesis α > 0.8 at the 0.01 level of significance.

Transcribed Image Text:

Advertising Net operating expenses profits 1.5 1.0 2.8 0.4 1.3 2.0 3.6 2.8 5.4 1.9 2.9 4.3