A corporation owns several companies. The strategic planner for the corporation

Question

A corporation owns several companies. The strategic planner for the corporation believes dollars spent on advertising can to some extent be a predictor of total sales dollars. As an aid in long-term planning, she gathers the following sales and advertising information from several of the companies for 2009 ($ millions). a. Construct a 98% confidence interval for the average value of y for the given data; use x = 20, s_e = 111.6, and the equation of the regression line, y = -46.76 + 15.26 x. Do not round the intermediate values. Round your answers to 2 decimal places.

Explanation / Answer

lets first calculate the Y value for x = 20 and the given regression equation

y = -46.76+15.26*40 = 563.64

now we are also given the standard error Se = 111.6

we know that the confidence interval is given as

mean +- z*SE , we first check the z value for 98% CI as 2.33

so we put the values as

563.64 +- 2.33*111.6

303.6 and 823.6

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