The Minister of Industry and Trade is interested in the characteristics of local businesses. He decides to concentrate on businesses in the Parramatta CBD and the Sydney CBD. He employs a research company to survey 70 local businesses. This was carried out and the following variables recorded.

Column 1 Profit What was your profit?

Column 2 Advertising How much money was spent on advertising in the financial year?

Column 3 Employee How many employees work at your business?

Column 4 Age How old is the company (in years)?

Column 5 Type Is the business privately held, publicly traded or a franchise?

(Private = 1, Public = 2, Franchise = 3)

Column 6 Location Where is the company? (1 = Parramatta CBD, 2 = Sydney CBD)

Question 3 (7 marks)

Can we conclude, at a 5% level of significance, that a linear relationship exists between the company's Profit (y) and the amount spent on Advertising (x)?

Can you please work out showing the 6 steps of hypothesis testing and use all calculations/working out, statistical analysis using excel.

E.g. Step 1: Ho:1 = 2

HA:12

Step 6: .We can conclude at the 5% level of significance, that the average profits are different for businesses located in Parramatta CBD and businesses located in Sydney CBD.