Questions:
1. A company produces the financial results shown in the table below. The executives at the firm have good reason to believe that $10 million in sales will be generated in 2010. Using simple linear regression, you advise them that this will equate to...
|
Year
|
Sales Totals (in millions)
|
Profit Totals (in millions)
|
|
1998
|
$7.0
|
$0.15
|
|
1999
|
$2.0
|
$0.10
|
|
2000
|
$6.0
|
$0.13
|
|
2001
|
$4.0
|
$0.15
|
|
2002
|
$14.0
|
$0.25
|
|
2003
|
$15.0
|
$0.27
|
|
2004
|
$16.0
|
$0.24
|
|
2005
|
$12.0
|
$0.20
|
|
2006
|
$14.0
|
$0.27
|
|
2007
|
$20.0
|
$0.44
|
|
2008
|
$15.0
|
$0.34
|
|
2009
|
$7.0
|
$0.17
|
a. $209,600 in profits.
b. $2,096,000 in profits.
c. $186,900 in profits.
d. $1,869,000 in profits.
2. When the CEO asks you how sure you are of the accuracy of the result provided in Problem #21 above, you show her the r-squared value and respond...
a. "54% sure."
b. "67% sure."
c. "84% sure."
d. "93% sure."