Exercise 2An organisation is using linear regression analysis to establish an equation that shows a relationship between advertising expenditure and sales. It will then use the equation to predict sales for given levels of advertising expenditure. Data for the last five periods are as follows:What are the value of ‘∑x’ , ‘∑y’ and ‘ n’ that need to be inserted into the appropriate formula?
A. $600,000 $100,000 5
B. $100,000 $600,000 5
C. $600,000 $100,000 10
D. $100,000 $600,000 10
The following statements have been made about linear regression analysisI It provides more accurate estimates than the high low techniquei It can only be used to estimate variable costii It assumes that cost behaviour is lineariv It only takes into account two observations of cost and outputWhich of the following statements about the use of linear regression analysis in cost estimation are true?
A. i and ii
B. i and iii
C. ii and iii
D. iii and iv
Which of the following correlation coefficients indicates the weakest relationship between two variables?
A. +1.0
B. +0.4
C. -0.6
D. -1.0