3. The following data shows expenditures (in millions of dollars) and case (sales in millions) for seven major soft drink brands. Show a scatter diagram of the data and describe in words what it tells you. Calculate the correlation coefficient and see if it backs up the scatter diagram. Is this significant at the 5% level (ie, á=.05)? Construct the regression equation for this data. Decide how much RC Cola would make if they spend 643.8. Do the same for Canada Dry if they spend 13.8. Is it a good idea to use this regression equation for RC and Canada Dry? Why?
Brand Spending Sales
Coca-Cola 131.3 1929.2
Pepsi 92.4 1384.6
Diet Coke 60.4 811.4
Sprite 55.7 541.5
Dr. Pepper 40.2 536.9
Mountain Dew 29.0 535.6
7-Up 11.6 219.5
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