Question

A recent article in Bloomberg Businessweek listed the “Best Small Companies.” We are interested in the current results of the companies’ sales and earnings. A random sample of 12 companies was selected and the sales and earnings, in millions of dollars, are reported below.

Company	Sales ($ millions)			Earnings ($ millions)			Company	Sales ($ millions)			Earnings ($ millions)
Papa John's International	$	94.1		$	4.9		Checkmate Electronics	$	17.5		$	2.6
Applied Innovation		18.6			4.4		Royal Grip		14.6			1.7
Integracare		20.5			1.3		M-Wave		19.6			3.5
Wall Data		71.7			8.0		Serving-N-Slide		52.8			8.2
Davidson & Associates		58.6			6.6		Daig		28.6			6.0
Chico's FAS		51.2			4.1		Cobra Golf		69.2			12.8

Let sales be the independent variable and earnings be the dependent variable. (Round your answers to 3 decimal places.)

a.	The coefficient of correlation is .
b.	The coefficient of determination is .
c.	The regression equation, with the coefficients, is Y' =  +  X
d.	For a small company with $54 million in sales, an estimate of the earnings is  ($ millions).

Answer 1

a)

coefficient of correlation is r =0.637

b)

coefficient of determination =0.406

c)

Y' = 2.004+ 0.077 X

d)

estimate =2.004+0.077*54=6.162 (try 6.187 if this comes wrong)