Question: The file Profits.Xls provides cross-section data on total 1995 sales and profits for 27 German companies.

a) Construct a scatter diagram showing the relationship between profits as a function of sales, and add a trendline using the Add Trendline option in Excel.

b) Develop a simple linear regression model for estimating profits as a function of sales. Report the estimated regression line and briefly interpret the estimated relationship between the variables.