Question

Consider the below data which is based on a company’s sales in Year 1 through Year 12 along with the national income of the country, where the business is set up. Year National Income (in millions of dollars) x Company's sales (in thousands of dollars) y Year 1 305 470 Year 2 316 485 Year 3 358 499 Year 4 350 515 Year 5 375 532 Year 6 392 532 Year 7 400 556 Year 8 398 576 Year 9 430 583 Year 10 456 587 Year 11 578 601 Year 12 498 605 Develop a simple linear regression equation to predict the company's sales (Y), given the national income (X). Model: Y= B0 +B1X1) Copy and paste your Regression output in here 2) How much variation in the sample values of company’s sales is explained by this regression model

Answer 1

Y= 0.534X+ 491.86

1) See attachment

2) 79.9 %

Step-by-step explanation:

1) The data was run on excel to find the linear regression model. The summary of results is attached. The coefficients value against intercept is the Y-intercept or B0 value. The coefficients value againts National Income is the gradient of the equation or B1.

2) the R square value explains the degree of variation or how much variation is explained by the equation. Here this value is 0.79859 or 79.9%.