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The following table shows the mean annual percent return on capital (profitability) and the mean ann

Question: The following table shows the mean annual percent return on capital (profitability) and the mean annual percentage sales growth for eight aerospace and defense companies.

Company	Profitability	Growth
Alliant Techsystems	23.1	8.0
Boeing	13.2	15.6
General Dynamics	24.2	31.2
Honeywell	11.1	2.5
L-3 Communications	10.1	35.4
Northrop Grunmman	10.8	6.0
Rockwell Collins	27.3	8.7
United Tech.	20.1	3.2

a. Compute the coefficient of correlation. Conduct a test of hypothesis to determine if it is reasonable to conclude that the population correlation is greater than zero. Use the .05 significance level.

b. Develop the regression equation for profitability based on growth. Comment on the slope value.

c. Use a software package to determine the residual for each observation. Which company has the largest residual?

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