SKIMB Limited have been using radio advertisements to advertise their new weight lost program for the past 12 months. The managing director has asked
the sales team to assess the effect of these advertisements on sales for that
year. Consider sales amount as the dependent variable and the number of
advertisements as the independent variable. The sales amount (in ‘000) and
the number of advertisements are shown below.
Experience and monthly salary of 9 employees at A-Z Co. Ltd.
Month No of Advertisements Amount in sales in ‘000
1 20 61
2 24 77
3 30 72
4 23 66
5 27 85
6 25 77
7 32 90
8 35 100
9 21 63
10 34 97
11 26 83
12 29 70
Using either excel or calculating using formulae, complete the following tasks:
Note: If using excel, summit a copy of the regression output with your answer.
a) Show the above data on a scatter plot, and include the regression line
(4 marks)
b) Calculate the regression equation and r-squared. (4 marks)
c) Construct a 95% confidence interval for B (3 marks)
d) Calculate the standard deviation of error (3 marks)
e) Test at the 5% significance level whether the slope of the regression
line is positive. (6 marks)