Question

In: Statistics and Probability

Advertisement ($'000) Sales ($'000) 1068 4489 1026 5611 767 3290 885 4113 1156 4883 1146 &nbsp

Advertisement ($'000) Sales ($'000)

1068 4489

1026 5611

767 3290

885 4113

1156 4883

1146 5425

892 4414

938 5506

769 3346

677 3673

1184 6542

1009 5088

Construct a scatter plot with this data.
Do you observe a relationship between both variables?
Use Excel to fit a linear regression line to the data. What is the fitted regression model?
What is the slope? What does the slope tell us?Is the slope significant?
What is the intercept? Is it meaningful?
What is the value of the regression coefficient,r? What is the value of the coefficient of determination, r^2? What does r^2 tell us?
Use the model to predict sales and the business spends $950,000 in advertisement. Does the model underestimate or overestimates ales?

Expert Solution

Solution:

· Construct a scatter plot with this data.

The required scatter plot is given as below:

· Do you observe a relationship between both variables?

From above scatterplot we observe the positive linear relationship or association between the two variables.

· Use Excel to fit a linear regression line to the data. What is the fitted regression model?

The regression model by using Excel is given as below:

Regression Statistics
Multiple R	0.823733298
R Square	0.678536546
Adjusted R Square	0.6463902
Standard Error	592.7335727
Observations	12

ANOVA
	df	SS	MS	F	Significance F
Regression	1	7415845.784	7415845.784	21.10773517	0.00098869
Residual	10	3513330.883	351333.0883
Total	11	10929176.67

	Coefficients	Standard Error	t Stat	P-value	Lower 95%	Upper 95%
Intercept	-25.16823406	1042.259927	-0.024147752	0.981209823	-2347.468062	2297.131593
Advertisement	4.921595798	1.071235915	4.594315528	0.00098869	2.534733447	7.30845815

The regression equation is given as below:

Sales = -25.16823406 + 4.921595798*Advertisement

· What is the slope? What does the slope tell us?Is the slope significant?

The slope is given as b = 4.921595798. The slope tell us that there is an increment of 4.92 ($’000) in the sales as there is an increment of $1000 on advertisement.

The slope is statistically significant because corresponding p-value is given as 0.00098869 which is less than alpha value 0.05.

· What is the intercept? Is it meaningful?

The value of intercept is given as -25.16823406.

The intercept is not meaningful, because corresponding p-value is given as 0.9812 which is greater than alpha value 0.05.

· What is the value of the regression coefficient, r? What is the value of the coefficient of determination, r^2? What does r^2 tell us?

The value of the regression coefficient r is given as 0.823733298.

The value of the coefficient of determination is given as r^2 = 0.678536546.

This value indicated that about 67.85% of the variation in the dependent variable sale is explained by the independent variable advertisement.

· Use the model to predict sales and the business spends $950,000 in advertisement. Does the model underestimate or overestimates ales?

We have

Sales = -25.16823406 + 4.921595798*Advertisement

Advertisement = 950 thousand dollar ( or $950,000)

Sales = -25.16823406 + 4.921595798*950

Sales = 4650.347774

The value of sales is lies within range, so it is underestimate.

orchestra answered 2 years ago

A retailer has the following budgeted sales: May $3 000 000 June $2 500 000 July...

A retailer has the following budgeted sales: May $3 000 000 June $2 500 000 July $2 200 000 August $2 800 000 The store employees earn fixed monthly salaries totalling $120 000 and 10% commissions of current monthly sales. Disbursements are made semi- monthly, that is half to be paid a month after salaries and commissions are earned. Other expenses are: Rent $30 000 paid 1st day of each month miscellaneous expenses 6% of sales insurance $3 000 per...

You work in a sales department and want to know if a new advertisement campaign is...

You work in a sales department and want to know if a new advertisement campaign is effective at increasing sales. You have three quarters (quarter of a year) of sales data after the new advertisement campaign: Q1= $100,000 , Q2 = $110,000, and Q3= $75,000. You know quarterly sales prior to the new ad campaign followed a normal distribution with a mean of $80,000 and a standard deviation of $10,000. \ -Write the distribution for sales prior to the new...

Maluwana Stores had sales of K700, 000 in November and K850, 000 in December. It expects...

Maluwana Stores had sales of K700, 000 in November and K850, 000 in December. It expects sales to be as follows during the first six months of the next year: Month January February March April May June Sales K500, 000 450,000 550,000 600,000 625,000 600,000 In the past, 17.5 percent of Maluwana’s sales are paid in cash at the time of the sale, 52.5 percent are paid the following month, and 30 percent are paid in the second month following...

Busiswa Agri Business, has sales of R400 000 in March and R480 000 in April. Forecasted...

Busiswa Agri Business, has sales of R400 000 in March and R480 000 in April. Forecasted sales for May, June and July are R560 000, R640 000 and R800 000 respectively. The firm has an opening cash balance of R40 000 on 1 May and wishes to maintain a minimum cash balance of R40 000 during each month. The following additional information also applies to Busiswa Agri Business • 25% of sales is collected in the month of sale, 50%...

answer the question 1-What is meant by "The sales spell"? Explain in marketing or advertisement. Is...

answer the question 1-What is meant by "The sales spell"? Explain in marketing or advertisement. Is there a Right spell? What is "No" Reflex that consumers have? Explain.

Grace saw an advertisement posted by Apari on a car sales website that said “For Sale:...

Grace saw an advertisement posted by Apari on a car sales website that said “For Sale: 2015 Hyundai hatchback”. Grace telephoned Apari on 3 April and after some discussions about the car and its condition, Grace said to Apari “I’m interested in the car and could pay $12,000 for it”. Apari replied “Thanks, but I won’t accept less than $15,000 for it. You’ve seen the photos, it’s in immaculate condition”. Grace said “Yes, it is in lovely condition, you’ve kept...

Sales Forecasts for the first quarter of 2018: January 11 000 units February 13 000 units...

Sales Forecasts for the first quarter of 2018: January 11 000 units February 13 000 units March 14 000 units. Unit selling price $100 Prepare the Sales Budget for Jan, Feb, and March. In addition to the info in problem #1, the company requires jan 20% of next month's budgeted sales as ending finished goods feb inventory each month. Ending inventory for 12/31/17 was mar 2,200 units. The Sales forecast for April is 20,000 units.

Following information for company XYZ in 2015 is given: sales $550 000, cost $332 000, depreciation...

Following information for company XYZ in 2015 is given: sales $550 000, cost $332 000, depreciation expense $120 000, interest expense 60 000, dividends 16 000, tax rate 35% percent. a) prepare income statement b) calculate company XYZ profit margin c) If company XYZ has total assets $250 000 and equity multiplier 2.5. What is return on equity (ROE) based on DuPoint identity? d) Discuss the three components of DuPoint identity

The following trial balance relates to Golden Ltd at 30th September 2018 GHS'000 GHS'000 Sales (a)...

The following trial balance relates to Golden Ltd at 30th September 2018 GHS'000 GHS'000 Sales (a) 760,000 Material purchases (b) 128,000 Production labour (b) 248,000 Factory overheads (b) 160,000 Distribution costs 28,400 Administrative expenses (c) 92,800 Finance costs 700 Investment income 1,600 Leased property - at cost (b) 100,000 Plant and equipment - at cost (b) 89,000 Accumulated amortisation/depreciation at 1/10/2017 - leased property 20,000 - plant and equipment 29,000 Equity investments (e) 36,000 Inventory at 1/10/17 93,400 Trade receivables...

Describe an advertisement or provide a copy of an advertisement for each of the two brands(nike...

Describe an advertisement or provide a copy of an advertisement for each of the two brands(nike and adidas), and use Maslow’s Hierarchy of Needs to identify the consumer need that this advertisement wants to trigger. Explain your selection with facts.