Problem: The value of a sports franchise is directly related to the amount of revenue that a franchise can generate. The file "BBRevenue2013" (file is on Canvas) represents the value in 2013 (in $millions) and the annual revenue (in $millions) for the 30 Major League Baseball franchises. Suppose you want to develop a simple linear regression model to predict franchise value based on annual revenue generated.
(In this problem, you must use Excel to solve the questions.) Copy and Paste the output of Excel.
a. Construct a scatter plot.
b. Use the least-squares method to determine the regression coefficients b0 and b1.
c. Interpret the meaning of b, and b, in this problem.
d. Predict the mean value of a baseball franchise that generates $250 million of annual revenue.
e. What would you tell a group considering an investment in a major league baseball team about the relationship between revenue and the value of a team?
f. Determine the coefficient of determination, r2, and interpret its meaning.