Year Sales (X) in millions Profit (Y) in millions XY X^2 Y^2 2003 10 0.5 5 100 0.25 2004 12 0.75 144 0.5625 2005 14 0.78 10.92 196 0.6084 2006 17 0.45 7.65 289 0.2025 2007 25 0.23 5.75 625 0.0529 1.8225 0.7569 2008 37 1.35 0.87 0.56 49.95 33.06 1369 2009 38 1444 2010 42 23.52 1764 0.3136 2011 62 0.84 52.08 3844 0.7056 2012 74 1.88 139.12 5476 3.5344 ТОTAL 331 8.21 336.05 15251 8.8093

MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
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Chapter1: Starting With Matlab
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The ABC Company is involved in the production and selling of consumer goods, particularly beauty products such as bath soap and shampoo and had registered a positive profit growth for the last 10 years.

However, the current year seems to be different from those years as the company is expecting a decline in profit; which is estimated to be about 70% below the target. The manager now is in a dilemma … asking himself/herself “What happened, why this decline in profit?” The Manager then asked the company Accountant to give him/her the data on sales and advertising cost for the last 10 years – he/she wants these data to determine whether the company can live without advertising, as advertising cost happens to be substantial.

Justify your answer by doing as step-by-step procedure in Correlation Analysis using a 0.05 level of significance.

The data are as follows –

 

Year
Sales (X) in millions Profit (Y) in millions
XY
X^2
Y^2
2003
10
0.5
5
100
0.25
2004
12
0.75
9
144
0.5625
2005
14
0.78
10.92
196
0.6084
2006
17
0.45
7.65
289
0.2025
2007
25
0.23
5.75
625
0.0529
2008
37
1.35
49.95
1369
1.8225
2009
38
0.87
33.06
1444
0.7569
2010
42
0.56
23.52
1764
0.3136
2011
62
0.84
52.08
3844
0.7056
2012
74
1.88
139.12
5476
3.5344
TOTAL
331
8.21
336.05
15251
8.8093
Transcribed Image Text:Year Sales (X) in millions Profit (Y) in millions XY X^2 Y^2 2003 10 0.5 5 100 0.25 2004 12 0.75 9 144 0.5625 2005 14 0.78 10.92 196 0.6084 2006 17 0.45 7.65 289 0.2025 2007 25 0.23 5.75 625 0.0529 2008 37 1.35 49.95 1369 1.8225 2009 38 0.87 33.06 1444 0.7569 2010 42 0.56 23.52 1764 0.3136 2011 62 0.84 52.08 3844 0.7056 2012 74 1.88 139.12 5476 3.5344 TOTAL 331 8.21 336.05 15251 8.8093
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