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# Relationship Between Retail Sales and Advertising Dollars

Please refer to the attachment for the original question.

The following data were collected on the study of the relationship between a company's retail sales and advertising dollars:

29,789 16,893
35,434 18,398
38,732 20,376
43,585 22,982
46,821 25,732
49,283 27,281
52,271 32,182
55,289 35,298
57,298 36,281
58,293 38,178

Obtain a linear regression line for the data. (Round your answer to 2 decimal places, the tolerance is +/-0.01.)

Compute a correlation coefficient and determine the strength of the linear relationship. (Round your answer to 2 decimal places, the tolerance is +/-0.01.)
Correlation coefficient is . It indicates a strong, postivea moderate, positiveno linear relationship. (Use not rounded amounts to answer this question.)

Using the linear regression equation, develop a forecast of retail sales for advertising dollars of \$40,946. (Round your answer to 2 decimal places, the tolerance is +/-0.01. Do not round intermediate results used to achieve this answer.)
Forecast = \$

#### Solution Preview

NOTE: PLEASE SEE THE ATTACHED FILE FOR A STEP-BY-STEP GUIDE.

Obtain a linear regression line for the data.

Step 1: Make a chart of your data, filling in the columns

X Y
Advertising (\$) Retail Sales (\$) XY X^2 Y^2
16,893 29,789 503225577 285,373,449 887,384,521
18,398 35,434 651914732 338,486,404 1,255,568,356
20,376 38,732 789203232 415,181,376 1,500,167,824
22,982 ...

#### Solution Summary

The solution is a statistical analysis of sales and advertising earnings. It used linear regression to verify the relationship of the variables. The step-by-step solution is contained the the attached spreadsheet file.

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