Question

E-Bags, Inc. sells premium designer backpacks through cable TV infomercials. The head of the company’s marketing department wants to determine the relationship between monthly backpack sales and the number of monthly TV infomercials. The data he gathered and the corresponding regression summary output are shown below.

Sales	TV Ads	SUMMARY OUTPUT
2.6	20	Regression Statistics
2.3	18	Multiple R	0.984
2.9	23	R Square	0.967
2.8	21	Adjusted R Square	0.965
1.5	11	Standard Error	0.145
3.4	25	Observations	15
3.2	22
1.9	15	ANOVA
3.3	24		df	SS	MS	F	F-signif.
2.2	18	Regression	1	8.124	8.124	386.426	0.000
1.6	14	Residual	13	0.273	0.021
2.7	19	Total	14	8.397
3.7	26
3.9	29		Coefficients	Standard Error	t Stat	P-value
3.8	27	Intercept	-0.328	0.163	-2.012	0.065
		TV Ads	0.150	0.008	19.658	0.000

Based on the above information:

1. Interpret the correlation coefficient.
   

2. Write out the regression equation.
   
3. Interpret the equation’s regression coefficient TV ads.
   
4. If the company pays for 30 infomercials next month, then what would the estimated monthly backpack sales as predicted by this regression model?

Answer 1