You have recently taken on work as the quantitative business analyst for a company that holds the DVD distribution rights for movies. The company wants to estimate the sales revenue for each DVD movie it distributes. Currently, the company tends to follow some adhoc guidelines to form these estimates. However, they have recently acquired some data on DVD sales, and have hired you to help analyse it and assess or inform/improve their DVD revenue estimation methods. The data are in the file "Movie.xls", available on the BUSS1020 Blackboard site. You are required to present and explain all your assumptions and discuss whether they could be true, or not, in each case, in answering each of the questions below
The company has always estimated DVD revenue differently, based on whether the box office revenue was in excess of $100 million, or not. In fact the company usually estimates that DVD revenue will be higher by $25 million when the box office revenue is in excess of $100 million.
i. Fully investigate the hypothesis that DVD revenues are larger on average when the box office revenue is in excess of $100 million. State all required assumptions, indicate your chosen level of significance (and why you chose it) and give a plain-English business context conclusion.
ii. Test the dealership's hypothesis that $25 million should be added to the estimated DVD revenue, when the box office revenue is in excess of $100 million. Does the data support that hypothesis?
Attachment:- Movie.xlsx