A recent article in Bloomberg Businessweek listed the “Best Small Companies.” We are interested in the current results of the companies’ sales and earnings. A random sample of 12 companies was selected and the sales and earnings, in millions of dollars, are reported below.
Let sales be the independent variable and earnings be the dependent variable.
a. Draw a scatter diagram.
b. Compute the correlation coefficient.
c. Determine the regression equation.
d. For a small company with $50.0 million in sales, estimate theearnings. |

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