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Profit How are a company’s profits related to its sales?

Stats: Data and Models | 4th Edition | ISBN: 9780321986498 | Authors: Richard D. De Veaux, Paul F. Velleman, David E. Bock ISBN: 9780321986498 70

Solution for problem 40RE Chapter 9

Stats: Data and Models | 4th Edition

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Stats: Data and Models | 4th Edition | ISBN: 9780321986498 | Authors: Richard D. De Veaux, Paul F. Velleman, David E. Bock

Stats: Data and Models | 4th Edition

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Problem 40RE

Problem 40RE

Profit How are a company’s profits related to its sales? Let’s examine data from 71 large U.S. corporations. All amounts are in millions of dollars.

a) Histograms of Profits and Sales and histograms of the logarithms of Profits and Sales appear below. Why are the re-expressed data better for regression?

b) Here are the scatterplot and residuals plot for the regression of logarithm of Profits vs. Log(Sales). Do you think this model is appropriate? Explain.

c) Here’s the regression analysis. Write the equation.

Dependent variable is: Log Profit

R-squared = 48.1%

Variable Coefficient

Intercept -0.106259

LogSales 0.647798

d) Use your equation to estimate profits earned by a company with sales of 2.5 billion dollars. (That’s 2500 million.)

Step-by-Step Solution:
Step 1 of 3

Successful Salespeople Are: 1. Prompt 2. Hardworking 3. Ethical 4. Always listening 5. Asking right questions 6. Sincerity 7. Creative 8. Full of empathy 9. Positive 10. Organized 11. Attention to detail 12. Thoroughly prepared 13. Good humor 14. Focused 15. Resourceful 16. Knowledgeable about their products 17. Knowledgeable about their industry 18. Knowledgeable about their competitors 19. Thick-skinned and resilient 20. Aggressive a. Not giving up easy b. May have to say the customer is wrong 21. Flexible 22. Quick thinking 23. Tough minded 24. Skilled in writing 25. Skilled in marketing 26. Skilled in math 27. Skilled in reading 28. We

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Chapter 9, Problem 40RE is Solved
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Textbook: Stats: Data and Models
Edition: 4
Author: Richard D. De Veaux, Paul F. Velleman, David E. Bock
ISBN: 9780321986498

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Profit How are a company’s profits related to its sales?