The value of a sports franchise is directly related to the amount of revenue that a franchise can generate. The file BBRevenue represents the value in 2010 (in millions of dollars) and the annual revenue (in millions of dollars) for the 30 major league baseball franchises. (Data extracted from www.forbes.com/2010/04/07/most-valuable- baseball-teams-business-sportsmoney-baseballvaluations- 10_values.html.) Suppose you want to develop a simple linear regression model to predict franchise value based on annual revenue generated.
a. Construct a scatter plot.
b. Use the least-squares method to determine the regression coefficients b0 and b1.
c. Interpret the meaning of b0 and b1 in this problem.
d. Predict the value of a baseball franchise that generates $150 million of annual revenue.