Question 4

The Apparel Co. Ltd. has been using television advertisements to advertise their new clothing line for the past 12 months. The sales manager wants to assess the effect of these advertisements on sales for the last 12 months. You are to consider sales amount as the dependent variable and the number of advertisements as the independent variable. The sales amount (in ‘000) and the number of advertisements are shown below. 

Monthly Sales and Advertising at The Apparel Co. Ltd

Using excel, complete the following tasks: 

Note: Summit a copy of the regression output with your answer.   

a) Show the above data on a scatter plot and include the regression line. 

Label the graph and line completely

b) What is the average sales across all months of advertising?

c) Identify r-squared on the regression output and interpret what it means in this scenario.

d) Identify the 95% confidence interval for B

e) Identify the 99% confidence interval for B

f) Identify the standard deviation of error at the 1% level of significance

g) Test at the 1% significance level whether the slope of the regression line is positive. Identify all steps in your analysis and make a complete and relevant decision.