The Table Shows the Profit Y (In Thousands of Dollars)that

question 24

Essay

The table shows the profit y (in thousands of dollars)that a company made during a
month when the price of its product was x dollars per unit. $\begin{array}{cc}\hline \text { Profit, } y & \text { Price, } x \\\hline 12 & 1.20 \\17 & 1.25 \\20 & 1.29 \\21 & 1.30 \\24 & 1.35 \\26 & 1.39 \\27 & 1.40 \\23 & 1.45 \\21 & 1.49 \\20 & 1.50 \\15 & 1.55 \\11 & 1.59 \\10 & 1.60 \\5 & 1.65 \\\hline\end{array}$

a. Fit the model $y = \beta _ { 0 } + \beta _ { 1 } x + \beta _ { 2 } x 2 + \varepsilon$ to the data and give the least squares prediction equation.
b. Plot the fitted equation on a scattergram of the data.
c. Is there sufficient evidence of downward curvature in the relationship between profit and price? Use $\alpha = .05$ .

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Definitions:

Aging the Receivables

The process of categorizing accounts receivable according to the length of time an invoice has been outstanding.

Due Date

The specified date by which a payment, assignment, or task is required to be completed or submitted.

Age Groupings

Classification of data or people into groups based on their age.

Interest Revenue

Income earned from lending funds or investing in interest-bearing financial instruments.