A company wants to determine the relationship between the company’s advertising expenditure and its sales revenue. If the relationship is a strong one, then the company will be able to forecast the sales revenue for a given advertising expenditure. The following data has been collected over the last nine years. Use the table to answer the questions:

Advertising (£000's)

Assignment Brief Page 4 of 6

Sales (£000's) 10.85 50.234 20.55 80.997 17.18 86.363 15.99 84.016 13.58 75.381 12.28 56.342 24.76 98.123 19.72 92.489 23.63 102.249

Using the table above answer the following questions:

1. Using sales as the dependent variable, conduct linear regression analysis.

2. Generate the scatterplot of the data with a trend line.

3. Write the regression equation that best fits the data.

4. Determine & interpret the slope and the intercept. Give your answer to 2 decimal places.

5. Using your analysis estimate the sales revenue when advertising is:

a. £14,000 b. £17,500

6. Which variables are statistically significant to your model? Give reasons for your answer.