The value of a sports franchise is directly related to the amount of revenue that a franchise can generate. The file BBValues represents the value in 2014 (in $ millions) and the annual revenue (in $ millions) for the 30 Major League Baseball franchises. (Data extracted from www. forbes. com/ mlb valuations/ list.) Suppose you want to develop a simple linear regression model to predict franchise value based on annual revenue generated.

a. Construct a scatter plot.

b. Use the least squares method to determine the regression coefficients b₀ and b₁.

c. Interpret the meaning of b₀ and b₁ in this problem.

d. Predict the mean value of a baseball franchise that generates $ 250 million of annual revenue.

e. What would you tell a group considering an investment in a major league baseball team about the relationship between revenue and the value of a team?