A recent article in Bloomberg Businessweeklisted the “Best Small Companies.†We are interested in the currentresults of the companies’ sales and earnings. A random sample of 12companies was selected and the sales and earnings, in millions ofdollars, are reported below.
| Sales | | Earnings | | | Sales | | Earnings |
| Company | ($ millions) | | ($ millions) | | Company | ($ millions) | | ($ millions) |
| Papa John’s International | $ | 91.2 | | | | 5.2 | | | | Checkmate Electronics | $ | 18.5 | | | | 2.6 | |
| Applied Innovation | | 20.3 | | | | 4.6 | | | | Royal Grip | | 12.8 | | | | 1.8 | |
| Wall Data | | 19.0 | | | | 1.4 | | | | M-Wave | | 19.8 | | | | 3.6 | |
| Integracare | | 75.0 | | | | 8.2 | | | | Serving-N-Slide | | 51.8 | | | | 8.3 | |
| Davidson & Associates | | 60.9 | | | | 6.6 | | | | Daig | | 29.9 | | | | 6.5 | |
| Chico’s FAS | | 48.2 | | | | 4.2 | | | | Cobra Golf | | 73.2 | | | | 12.8 | |
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a. Draw a scatter diagram
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| | | b. | The coefficient of correlation is | | | | c. | The regression equation, with thecoefficients, is Å· = | | + | | x | | d. | For a small company with$50 million in sales, an estimate of the earnings is | | ($ millions). |
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