The value of a sports franchise is directly related to the amount of revenue that a franchise can generate. The file BBRevenue2012 represents the value in 2012 (in $millions) and the annual revenue (in $millions) for the 30 Major League Baseball franchises. (Data extracted from www.forbes.com/mlb-valuations/list.) 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.