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Company ABC wants to understand how past advertising expenditures are related to sales in order to make future decisions about advertising. The following table lists

Company ABC wants to understand how past advertising expenditures are related to sales in order to make future decisions about advertising. The following table lists the advertising dollars spent and monthly sales for all the last 6 months by the company.

Month

Advertising Dollars

(100s)

Sales

(1000s)

October

5.8

96

November

7.2

103

December

8.6

117

January

5.0

85

February

6.1

99

March

7.2

105

What is the independent variable?

What is the dependent variable?

Make a scatter plot of the data? Either include one from Excel or draw one and send to me by email.

What type of relationship appears to exist between Advertising Dollars and Sales?

Use Excel or a graphing calculator to find the estimated simple linear regression equation.

Predict the monthly sales when $620 are spent on advertising.

What is the correlation coefficient (r)?

Interpret r.

What is the coefficient of determination (r2)?

Interpret r2.

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