In a recent survey concerning company sales and net earnings, 15companies responded with the following information.
| Company | Sales
($ thousands) | Net Earnings
($ thousands) |
|---|
| Runners | 54.8 | 4.1 |
| NorthCo | 24.0 | 0.8 |
| JenStar | 42.6 | 2.2 |
| Text Tech | 57.6 | 4.2 |
| Capital Consultants | 56.7 | 3.6 |
| Financial Services | 34.9 | 1.8 |
| Cantu Excavating | 49.5 | 2.8 |
| Pace Design | 25.7 | 1.0 |
| CanTech Supply | 21.4 | 0.4 |
| Second Time Around Clothing | 25.3 | 0.7 |
| Echo Systems | 23.1 | -0.1 |
| Antique Accents | 51.3 | 3.5 |
| Spin Master Toys | 52.4 | 3.7 |
| XYZ Co. | 37.1 | 1.3 |
| Stiller Co. | 40.9 | 2.6 |
a) Using a statistical computing tool, find theequation of the regression line.
For full marks your answer should be accurate to at least threedecimal places.
Å· = ? + ?x
b) Use the regression line from part a to estimatethe net earnings for a company with sales of $54.8 thousand.
For full marks your answer should be accurate to at least onedecimal place.
Earnings: ?
| c) | Given the regression equation from part a, which of thefollowing statements is most appropriate regarding company salesand earnings? | Positive sales means positive net earnings for anybusiness. | | Sales have no effect on net revenues. | | Insufficient sales can lead to net losses for somebusinesses. | | After a certain level of sales has been reached, net earningsstop growing entirely. |
|
