The following data represent a company's yearly sales volume andits advertising expenditure over a period of 5 years.
(Y) Sales in Advertising (X) Millions of Dollars in($10,000)
15 32
16 33
18 35
17 34
16 36
(a) Develop a scatter diagram of sales versus advertising andexplain what it shows regarding the relationship between sales andadvertising.
(b) Use the method of least squares to compute an estimatedregression line between sales and advertising by computing b0 andb1.
(c) If the company's advertising expenditure is $400,000, whatare the predicted sales? Give the answer in dollars.
(d) What does the slope of the estimated regression lineindicate?
