The Transactional Records Access Clearinghouse at Syracuse University reported data showing the odds of an Internal Revenue Service (IRS) audit. The following table shows the average adjusted gross income reported and the percent of the returns that were audited for 20 selected IRS districts.
District Adjusted Gross Income ($)                Percent Audited
Los Angeles 36,664                                            1.3
Sacramento 38,845                                            1.1
Atlanta 34,886                                                     1.1
Boise 32,512                                                        1.1
Dallas 34,531                                                       1.0
Providence 35,995                                              1.0
San Jose 37,799                                                   0.9
Cheyenne 33,876                                                0.9
Fargo 30,513                                                        0.9
New Orleans 30,174                                           0.9
Oklahoma City 30,060                                        0.8
Houston 37,153                                                  0.8
Portland 34,918                                                  0.7
Phoenix 33,291                                                   0.7
Augusta 31,504                                                  0.7
Albuquerque 29,199                                         0.6
Greensboro 33,072                                          0.6
Columbia 30,859                                              0.5
Nashville 32,566                                              0.5
Buffalo 34,296                                                 0.5
(a) Enter the data in STATA, use STATA to develop the estimated regression equation that could be used to predict the percent audited given the average adjusted gross income reported. Label your answers.
(b) At the 0.05 level of significance, determine whether the adjusted gross income and the percent audited are linearly related.
(c) Did the estimated regression equation provide a good fit? Explain.
(d) Use the estimated regression equation developed in part (a) to calculate a 95% confidence interval for the expected percent audited for districts with an average adjusted gross income of $35,000.

1. You should use STATA software for any calculations.
2. If you are performing a hypothesis test, make sure you state the hypotheses, the level of significance, the rejection region, the test statistic (and p-value, if requested), your decision (whether to reject or not to reject the null hypothesis), and a conclusion in managerial terms that answers the question posed. These
steps must be completed in addition to any STATA output.