Sales and profits A business analyst was interested in the relationship between a
Chapter 26, Problem 40(choose chapter or problem)
Sales and profits A business analyst was interested in the relationship between a companys sales and its profits. She collected data (in millions of dollars) from a random sample of Fortune 500 companies and created the regression analysis and summary statistics shown. The assumptions for regression inference appeared to be satisfied. T Profits Sales Count 79 79 Mean 209.839 4178.29 Variance 635,172 49,163,000 Std Dev 796.977 7011.63 Dependent variable is: Profits R-squared = 66.2% s = 466.2 Variable Coefficient SE(Coeff) Intercept -176.644 61.16 Sales 0.092498 0.0075 a) Is there a significant association between sales and profits? Test an appropriate hypothesis and state your conclusion in context. b) Do you think that a companys sales serve as a useful predictor of its profits? Use the values of both R2 and s in your explanation.
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