The owners of an e-business have been successful in sellingfashion products but are now venturing into another domain. Knowingthat the impact of advertising on profit cannot be overemphasized,they are interested in determining the right amount to allocate toadvertising for the new business. Based on a monthly report fromthe fashion e-business, a regression analysis of monthly profit (inthousands of dollars) on advertising spending (in hundreds ofdollars) produced the following results:

slope	yy-intercept	rr
1.28	2.488	0.7379

where yy = profit (in $1000s)
           xx= advertising spending (in $100s)

a. State the least-squares regression line forthe data.
Å· = Å· =

++

xx

b. Interpret the value of the slope as itrelates to this problem.

For every $1 increase in advertising spending, there is a $1.213increase in profit.

For every $100 increase in advertising spending, there is a$1,213 increase in profit.

For every $100 increase in advertising spending, there is a$121.3 increase in profit.

For every $1,000 increase in advertising spending, there is a$121.3 increase in profit.

c. Compute and interpret the coefficient ofdetermination.
R2=R2=

Round to 4 decimal places

d. Predict the monthly profit for a month whenadvertising is $2,300.

Round to the nearest cent

e. If the expected profit in a particular monthis $43,448, about how much should be set aside for advertising thatmonth?

Round to the nearest cent