Math 263: Excel Assignment 4
Deb Hughes Hallett
January 2010
The value of a business is thought to depend on its operating income (that is, the business’s income after
taxes, excluding the sale of assets like buildings or machinery). You will test this theory by looking at the
NBA teams. The data is in NBA.xlsx. (From Problem 2.19, page 98.)
(a) Make a scatter plot of value (as the response variable) against revenue (as the explanatory
variable). Label the axes. Find the correlation coefficient.
(b) Make a scatter plot of value (as the response variable) against operating income (as the
explanatory variable). Label the axes. Find the correlation coefficient.
(c) Comment on whether revenue or operating income appears to predict the value of the team
best. Give a reason for your answer.
Your scatter plot should show the value of the coefficient of determination. (That is, the value of
𝑅 2.)
To make a scatter plot in Excel 2007
1. Select the data, go to the Insert menu, then select Scatter. (Note: Do not use the Line graph
instead.)
2. Excel will take the first column as the explanatory (x) variable and the second column as the
response (y) variable. If you want to alter this, either move the columns or right click on the
scatter plot and Select Data, then Edit.
3. Label the axes by selecting the graph and going to the Layout menu.
4. To find the regression line and the correlation coefficient, right click on the data points in the
scatter plot and Add Trendline. The default is Linear (which we will use) and you can check the
boxes to get the equation of the regression line and the correlation coefficient.