Regression Analysis DATA Fiscal year ends in December. USD in millions except per APPLE SAMSUNG APPLE share data. Revenue Revenue ADVERTISING SAMSUNG ADVERTISING 2012-12 156508 5469200 10040 74677 2013-12 170910 6119486 10830 106754 2014-12 182795 5182708 11993 94473 2015-12 233715 5297402 14329 99936 2016-12 215639 4690337 14194 97657 SAMSUNG V/S APPLE REVENUE SAMSUNG REVENUE V/S ADVERTISING SAMSUNG REVENUE V/S ADVERTISING Regression equation revenue = 458754.248 + 8.07*advertising FORECAST REVENUE advertising cost predicted revenue 74677 5190232.68 106754 5449115.14 94473 5349999.4 99936 5394089.4 97657 5375696.37 SAMSUNG REVENUE V/S ADVERTISING Coefficient of determination R^2 = 3.54% SAMSUNG REVENUE V/S ADVERTISING 95% confidence interval estimate of 1 Lower 95% SAMSUNG ADVERTISING -69.3569474 Upper 95% 85.49826092 PROJECT PRO A 1 The vice president for one of your company is concerned about the effect of advertising on sales of the firm major product. To investigate the relationship between advertising and sales, a ten-year random sample historical data on the two variables were gathered. Sales and advertising are both expressed in hundreds of dollars. a. Develop a scatter diagram with advertisement on the horizontal axis. b. What does the scatter diagram developed in part (a) indicate about the relationship between the two variables? c. Compute and interpret the sample covariance. d. Compute and interpret the sample correlation coefficient. e. Run a simple regression analysis f. Is there a linear relationship between sales and advertising? Use = 0.05. State the hypothesis to be tested, the decision rule, the test statistic, and your conclusion. g. What implications does this test result have on the firm? h. What is the sample regression equation relating sales to advertising? i. If ADV increases by $ 1000, what would be the resulting change in your prediction of SALES? j. What percentage of the variation in sales has been explained by the regression? TIME SERIES/ REGRESSION ANALYSIS k. l. m. n. Graphically analyze the Time Series of the two companies. Rum a regression on one company and interpret your output. What is the regression equation? Forecast sales