A small Internet company wants to determine how the money they spend on Google A

Question

A small Internet company wants to determine how the money they spend on Google Adwords impacts their monthly revenue. Over 6 consecutive months, they vary the amount they spend on their Adwords campaign (in $) and record the associated revenue (in $) for each month. The data is shown below.

Adwords,Revenue

50,540

75,399

100,508

125,576

150,487

175,571

1) Develop a regression equation for predicting monthly revenue based on the amount spent with Adwords. What is the y-intercept? Give your answer to two decimal places.

2) What is the proper interpretation of the y-intercept in the regression equations?

a) The y-intercept describes the expected revenue if the company does not spend any money in a given month on Adwords.

b) The y-intercept describes the expected revenue if the company spends $25 in a given month on Adwords.

c) The y-intercept describes the expected increase in revenue for each additional dollar spent on Adwords.

d) The y-intercept describes the expected decrease in revenue for each additional dollar spent on Adwords.

3) What is the sample correlation between these two variables? Give your answer to two decimal places.

4) What is the slope of your regression equation? Give your answer to two decimal places.

5) Using a 0.1 level of significance, does this regression equation appear to have any value for predicting revenue based on Adwords expenditures?

a) No because there is a significant linear relationship between the two quantities.

b) No because there is not a significant linear relationship between the two quantities.

c) Yes because there is not a significant linear relationship between the two quantities.

d) Yes because there is a significant linear relationship between the two quantities.

Explanation / Answer

ANSWER :-

1) y-intecept = 450.88

2)

a)The y-intercept describes the expected revenue if the company does not spend any money in a given month on Adwords.

3) sample correlation = 0.39

4) slope = 0.56

5) b) No because there is not a significant linear relationship between the two quantities.

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