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In: Accounting

a. If they are going to run a linear regression, identify which variable should be the independent variable and which should be the dependent variable in a regression equation.

In seeking to determine how influential advertising is, the management of a recently established retail chain collected data on sales revenue and advertising expenditure from its' stores over the last ten (10) weeks. The table below shows the data collected: Advertising Expenditure ($ 000) Sales ($ 000) 3 5 76 50 250 700 450 3.5 75 4 150 4.5 7 200 750 7.5 800 8.5 1,100

a. If they are going to run a linear regression, identify which variable should be the independent variable and which should be the dependent variable in a regression equation.

b. Estimate the slope and intercept coefficients of the linear regression model. G if advertising expenditure is equal to $9,000, estimate the total sales income.

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Expert Solution

ekkarill92 answered 2 years ago
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