A small Internet company wants to determine how the money th

A small Internet company wants to determine how the money they spend on Google Adwords impacts their monthly revenue. Over 6 conse cutive 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. Assignment 10q2 data Develop a regression equation for predicting monthly revenue based on the amount spent with Adwords. What is the y -intercept? What is the proper interpretation of they -intercept in the regression equations? The y -intercept describes the expected revenue if the company does not spend any money in a given month on Adwords. The y -intercept describes the expected in crease in revenue for each additional dollar spent on Adwords. The y -intercept describes the expected decrease in revenue for each additional dollar spent on Adwords. The y -intercept describes the expected re venue if the company spends $25 in a given month on Adwords. What is the sample correlation between these two variables ? Give your answer to two decimal places. What is the slope of your regression equation? Give your answer to two decimal places. e) Using a 0.05 level of significance , does this regression equation appear to have any value for predicting revenue based on Adwordsx penditures? No because there is not a significant linear relation ship between the two quantities. Yes because there is a significant linear relation ship between the two quantities. No because there is a significant line arrelationship between the two quantities. Yes because there is not a significant line arrelationship between the two quantities.

Solution

A)

Using technology, we get              
              
intercept =    504.152381   [ANSWER]

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B)

By definition,

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

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c)      

Also, getting the correlation,              
              
r =    0.037449857   [ANSWER]

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d)      

Also, the slope is

slope =    0.044571429   [ANSWER]

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e)      

              
As t = r sqrt [(n - 2) / (1 - r^2)], then              
              
t =    0.074952292          
              
As alpha =    0.05          

df =    4          
              
Then              
              
tcrit =    2.776445105          
              
Thus, we fail to reject Ho.  

Thus,

OPTION A: No, beccause there is not a significant relationship between the two quantities. [ANSWER]