1. Xun Co. sells umbrellas in three cities. Management wants to generate a linear regression equation to use sales to predict future investment in advertisement. Given the data below,
1) Given a =5000, b=0.05, what is the forecasting equation?; if sales is $2 million, what is the predicted investment in advertisement?
2) If the correlation coefficient between sales and advertisement is 0.05, what does this number imply about the relationship between sales and advertisement?
3) If the Coefficient of Determination (r2) is 0.025 for this case, how do you interpret this number?