company is seeking to establish whether there is a linear relationship between the level of advertising expenditure and the subsequent sales revenue generated.

Figures for the last eight months are as follows:

Further information is available as follows:
> (Advertising expenditure x Sales revenue) = £1055.875 > (Advertising expenditure)? = £101.2625 > (Sales revenue)? = £11283.75 All of the above are given in £ million.
Required:

(a) Ona suitable graph plot advertising expenditure against sales revenue or vice versa as appropriate. Explain your choice of axes.
(5 marks)

(b) Using regression analysis calculate using the formulae given in this chapter a line of best fit. Plot this on your graph from (a).
(5 marks)
ACCA - Financial Information for Management

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Advertising expenditure Sales revenue Month (000) (000) 1 2.65 30.0 2 4.25 45.0 3 1.00 17.5 4 5.25 46.0 5 4.75 44.5 6 1.95 25.0 7 3.50 43.0 8 3.00 38.5 Total 26.35 289.5