KINDLY HELP ME WITH THIS. THANK YOU SO MUCH
Brenda 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.
If you are the company Manager, what will be your decision about advertising?
Justify your answer by doing a step-by-step procedure in Correlation Analysis using a 0.05 level of significance.
The data are as follows –
Extracted text: Year Sales (X) in millions Advertising Expense (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