A small Internet company wants to determine how the money they spend on Google A
ID: 3226380 • Letter: A
Question
A small Internet company wants to determine how the money they spend on Google Adwords impacts their monthly revenue. Over 6 consecutive months, they vary the amount they spend on their Adwords campaign (in $) and record the associated revenue (in $) for each month. The data is shown below. Assignment 10q2 data a) Develop a regression equation for predicting monthly revenue based on the amount spent with Adwords. What is the y-intercept? Give your answer to two decimal places. 504.152 Correct: Your answer is correct. b) What is the proper interpretation of the y-intercept in the regression equations? The y-intercept describes the expected increase in revenue for each additional dollar spent on Adwords. The y-intercept describes the expected revenue if the company spends $25 in a given month on Adwords. The y-intercept describes the expected decrease in revenue for each additional dollar spent on Adwords. The y-intercept describes the expected revenue if the company does not spend any money in a given month on Adwords. Correct: Your answer is correct. c) What is the sample correlation between these two variables? Give your answer to two decimal places. 0.0374 Correct: Your answer is correct. d) What is the slope of your regression equation? Give your answer to two decimal places. 0.04457 Correct: Your answer is correct. e) Using a 0.05 level of significance, does this regression equation appear to have any value for predicting revenue based on Adwords expenditures? No because there is a significant linear relationship between the two quantities. Yes because there is not a significant linear relationship between the two quantities. Yes because there is a significant linear relationship between the two quantities. No because there is not a significant linear relationship between the two quantities. Adwords,Revenue 50,588 75,438 100,452 125,518 150,534 175,525
Explanation / Answer
Following is the output of regression analysis generated by excel:
(a)
y -intercept: 504.15
(b)
The y-intercept describes the expected revenue if the company does not spend any money in a given month on Adwords.
(c)
The correlation coeffcient is
r = 0.04
(d)
The slope is:0.04
(e)
The p-value is 0.9439
Since p-value is greater than 0.05 so we cannot conclude that model is signficant.
No because there is not a significant linear relationship between the two quantities.
SUMMARY OUTPUT Regression Statistics Multiple R 0.037449857 R Square 0.001402492 Adjusted R Square -0.248246885 Standard Error 62.19144789 Observations 6 ANOVA df SS MS F Significance F Regression 1 21.72857143 21.72857 0.005617846 0.943851476 Residual 4 15471.10476 3867.776 Total 5 15492.83333 Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Intercept 504.152381 71.55556552 7.045607 0.002139402 305.4822813 702.8224806 Adowrds, X 0.044571429 0.594663982 0.074952 0.943851476 -1.606480474 1.695623331