Question: Suppose that I start a small home business that makes healthy, organic cookies and cakes for dogs that can be purchased for special holidays (e.g., cakes for birthdays, heart-shaped cookies for Valentine’s Day, etc.). I am interested in learning how much I should spend on advertising. I find data for the past year (2005) about advertising expenditures ( X ) and sales ( Y ) for 7 small companies that also cater to individuals who own dogs. I obtain the following set of data (both advertising expenditures and sales are reported in thousands of dollars).

1. What is the deviation score for sales for Company 7? ( 1 point )
2. What is the sum of the deviation scores for sales? ( 1 point )
3. What is the correlation for advertising expenditures and sales? ( 3 points )
4. What would be the predicted sales for a company who spent $10,000 on advertising? ( 4 points )

   	Coefficients	Standard Error	t Stat	P-value	Lower 95%	Upper 95%
   Intercept	24	26.58571	0.902741	0.408047	-44.3406	92.34063
   X	18.5	5.705261	3.242621	0.022883	3.834184	33.16582

   
   This means that the regression equation is
   \[Sales=24+18.5\,Adver\]
   When the advertising is $10,000 we have Adver = 10 and then evaluating in the regression equation
   \[Sales=24+18.5\times 10=209\]
   which means that the estimated sales are $209,000.
5. Based on these data, what decision should I make about spending money on advertising my dog cuisine? Provide a justification for your answer. (3 points ).
6. Over the next few days, I find data on advertising expenditures and sales on 7 additional dog companies. These are reported below.

Company X Y

8 8 130

9 9 110

10 9 100

11 10 100

12 12 90

13 12 80

14 13 80

Create a scatterplot of X and Y for all 14 companies (the next page is designed to resemble graph paper to make this easier). Does this scatterplot support your answer to part (e) of this question? Why or why not? ( 3 points )

Price: $2.99

Solution: The downloadable solution consists of 5 pages
Deliverable: Word Document