Develop an estimated regression equation that can be used

Question

Out-of-state tuition and fees at the top graduate schools of business can be very expensive, but the starting salary and bonus paid to graduates from many of these schools can be substantial. The following data show the out-of-state tuition and fees (rounded to the nearest $1000) and the average starting salary and bonus paid to recent graduates (rounded to the nearest $1000) for a sample of 20 graduate schools of business (U.S. News & World Report 2009 Edition America's Best Graduate Schools).

School	Tuition & Fees($1000s)	Salary & Bonus($1000s)
Arizona State University	28	98
Babson College	35	94
Cornell University	44	119
Georgetown University	40	109
Georgia Institute of Technology	30	88
Indiana University-Bloomington	35	105
Michigan State University	26	99
Northwestern University	44	123
Ohio State University	35	97
Purdue University-West Lafayette	33	96
Rice University	36	102
Stanford University	46	135
University of California-Davis	35	89
University of Florida	23	71
University of Iowa	25	78
University of Minnesota-Twin Cities	37	100
University of Notre Dame	36	95
University of Rochester	38	99
University of Washington	30	94
University of Wisconsin-Madison	27	93

.a. Develop a scatter diagram with salary and bonus as the dependent variable.

b. Does there appear to be any relationship between these variables? Explain.

c. Develop an estimated regression equation that can be used to predict the starting salary and bonus paid to graduates given the cost of out-of-state tuition and fees at the school.

d. Test for a significant relationship at the .05 level of significance. What is your conclusion?

e. Did the estimated regression equation provide a good fit? Explain.

f. Suppose that we randomly select a recent graduate of the University of Virginia graduate school of business. The school has an out-of-state tuition and fees of $43,000. Estimate the starting salary and bonus for this graduate.