The Gilmore Accounting firm, in an effort to explain variation in client profitability, collected the data found in the file called Gilmore , where:
y = Net profit earned from the client
x1 = Number of hours spent working with the client
x2 = Type of client:
1, if manufacturing
2, if service
3, if governmental
a. Develop a scatter plot of each independent variable against the client income variable. Comment on what, if any, relationship appears to exist in each case.
b. Run a simple linear regression analysis using only variable x1 as the independent variable. Describe the resulting estimate fully.
c. Test to determine if the number of hours spent working with the client is useful in predicting client profitability.