Question

A sales manager used linear regression to find the positive linear relationship between advertising expenditures and sales. the equation was calculated from the following data from 7 randomly selected advertising campaigns:

Advertising Expenditures - $8,000 / $22,000 / $15,000   / $39,000 / $32,000 / $12,000 / $45,000

Sales - $95,000 / $190,000 / $125,000 / $ 225,000 / $285,000 / $150,000 / $350,000

If the sales manager used the regression equation to predict the amount of sales that he can expect for advertising expenditures of $35,000, and then used the equation to predict the amount of sales he can expect for advertising expenditures of $65,000, Which prediction would probably be more reliable and why? Must use calculator or Spss and work must show your evidence. to why?

Answer 1