Solve the following problem:
Simple Linear Regression -Sales
"A recent study was conducted to determine the relation between advertising expenditures and sales of widgets for the first year of production."
You would like to determine the effect of your ad expenditures in predicting sales.The following data was collected:
Ad Expenditures Sales 1. Produce a scatterplot with linear trendline
40,000 289,000
55,000 423,000
35,000 250,000
50,000 400,000
43,000 335,000
60,000 470,000
52,000 408,000
39,000 320,000
47,000 415,000
38,000 389,000
2. Produce the regression equation for the ad expenditures predicting sales.
3. What is the slope of the line?
4. What is the estimated sales if the ad expenditures are $65,000?
5. Interpret in words the R square value (coefficient of determination).