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# R&D is considered one of the vital components of IT company performance.

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R&D is considered one of the vital components of IT company performance. It is common believe that IT R&D spend will directly impact the company revenues. The following data shows the annual IT spending of a company A and annual Revenue (data with one year lag) over the past 10 years.

Find the least-squares estimates for the regression line y = b0 + b1x. If the project I&D spending for year 2007 is \$600,000, what will be the annual revenue the year after?
Based on the regression analysis, do you conclude that R&D spend will affect the company sales revenue? What is the 98% confidence interval for parameter b1? Can you explain meaning of the confidence interval here?
Based on the information provided the "x Line Fit Plot" chart given in the regression output, do you think the current LINEAR regression model y = b0 + b1x is an appropriately? Can you propose a better regression relationship? You are not required to find the relationship numerically, but required to write out the proposed model and give explanations.

#### Solution Summary

R&D is considered one of the vital components of IT company performance.

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