Question

Consider the following sample data for the relationship between advertising budget and sales for Product A:

Observation	1	2	3	4	5	6	7	8	9	10
Advertising ($)	50,000	60,000	60,000	70,000	70,000	80,000	90,000	90,000	100,000	110,000
Sales ($)	299,001	371,000	364,000	430,000	440,000	485,000	535,000	546,000	595,000	675,000

What is the slope of the "least-squares" best-fit regression line?

Please round your answer to the nearest hundredth.

Note that the correct answer will be evaluated based on the full-precision result you would obtain using Excel.

Answer

Answer 1

Here x = independent variable = Advertising

y = Dependent variable = Sales

x	y
50000	299001
60000	371000
60000	364000
70000	430000
70000	440000
80000	485000
90000	535000
90000	546000
100000	595000
110000	675000

We can solve this question using excel.

First, enter data into excel.

Click on Data -------> Data Analysis --------> Regression ------->

Input

Input Y Range : select y values

Input X Range :select values of x.

Output Range: select an empty cell

---------> ok

We get

SUMMARY OUTPUT
Regression Statistics
Multiple R	0.997459
R Square	0.994924
Adjusted R Square	0.99429
Standard Error	8743.382
Observations	10
ANOVA
	df	SS	MS	F	Significance F
Regression	1	1.2E+11	1.2E+11	1568.178	1.82E-10
Residual	8	6.12E+08	76446723
Total	9	1.2E+11
	Coefficients	Standard Error	t Stat	P-value	Lower 95%	Upper 95%	Lower 95.0%	Upper 95.0%
Intercept	8090.036	12085.85	0.669381	0.522098	-19780	35960.06	-19780	35960.06
x	5.973206	0.150838	39.60023	1.82E-10	5.625374	6.321038	5.625374	6.321038

So the least squares line is y = 8090.036 + 5.973206*x

So the slope is 5.97 ( After rounding nearest hundredth)