Charity Navigator is America's leading independent charity evaluator. The following data show the total expenses (), the percentage of the total budget spent on administrative expenses, the percentage spent on fundraising expenses, and the percentage spent on program expenses for  supersized charities. Administrative expenses include overhead, administrative staff and associated costs, and organizational meetings. Fundraising expenses are what a charity spends to raise money, and program expenses are what the charity spends on the programs and services it exists to deliver. The sum of the three percentages does not add to  because of rounding.

#

Charity
Total Expenses
($) Administrative
Expenses
(%) Fundraising
Expenses
(%) Program
Expenses
(%)

1 American Red Cross 3,354,177,445 3.9 3.8 92.1

2 World Vision 1,205,887,020 4.0 7.5 88.3

3 Smithsonian Institution 1,080,995,083 23.5 2.6 73.7

4 Food For The Poor 1,050,829,851 0.7 2.4 96.8

5 American Cancer Society 1,003,781,897 6.1 22.2 71.6

6 Volunteers of America 929,158,968 8.6 1.9 89.4

7 Dana-Farber Cancer Institute 877,321,613 13.1 1.6 85.2

8 AmeriCares 854,604,824 0.4 0.7 98.8

9 ALSAC—St. Jude Children’s
Research Hospital 829,662,076 9.6 16.9 73.4

10 City of Hope 736,176,619 13.7 3.0 83.1

a. Select a scatter diagram with fundraising expenses () on the horizontal axis and program expenses () on the vertical axis.

A. B.

C. D.

- Select your answer -ABCDItem 1

Looking at the data, do there appear to be any outliers and/or influential observations?

The scatter diagram - Select your answer -doesdoes notItem 2 indicate potential influential observation(s). If there are potential influential observations enter the number of charity organizations as indicated in the table above separated by commas as needed. If there are no potential influential observations leave the input box blank. For example if you think that the answer is American Red Cross enter 1.

The scatter diagram - Select your answer -doesdoes notItem 4 indicate potential outlier(s). If there are potential influential observations enter the number of charity organizations as indicated in the table above separated by commas as needed. If there are no potential influential observations leave the input box blank. For example if you think that the answer is American Red Cross enter 1.

b. Develop an estimated regression equation that could be used to predict program expenses () given fundraising expenses ().

      (to 2 decimals)

c. Does the value for the slope of the estimated regression equation make sense in the context of this problem situation? Enter negative values as negative numbers.

The slope of the estimtaed regression equation is  . Thus, for every  increase in the amount spent on fundraising the percentage spent on program expenses will - Select your answer -decreaseincreaseItem 9 by  ; in other words, just a little under . The - Select your answer -negativepositiveItem 11 slope and value seem to make sense in the context of this problem situation (to 2 decimals).

d. Use residual analysis to determine whether any outliers and/or influential observations are present. Briefly summarize your findings and conclusions. Round to 3 decimals and enter negative value as negative numbers, if necessary.

# Charity Standard Residuals Leverage

1 American Red Cross

2 World Vision

3 Smithsonian Institution

4 Food For The Poor

5 American Cancer Society

6 Volunteers of America

7 Dana-Farber Cancer Institute

8 AmeriCares

9 ALSAC—St. Jude Children’s
Research Hospital

10 City of Hope

Observation  is an outlier because it has a large standardized residual.

Observation  is an influential observation becasuse has high leverage.

Question

Charity Navigator is America's leading independent charity evaluator. The following data show the total expenses (), the percentage of the total budget spent on administrative expenses, the percentage spent on fundraising expenses, and the percentage spent on program expenses for supersized charities. Administrative expenses include overhead, administrative staff and associated costs, and organizational meetings. Fundraising expenses are what a charity spends to raise money, and program expenses are what the charity spends on the programs and services it exists to deliver. The sum of the three percentages does not add to because of rounding.

#	Charity	Total Expenses ($)	Administrative Expenses (%)	Fundraising Expenses (%)	Program Expenses (%)

1	American Red Cross	3,354,177,445		3.9		3.8	92.1
2	World Vision	1,205,887,020		4.0		7.5	88.3
3	Smithsonian Institution	1,080,995,083		23.5		2.6	73.7
4	Food For The Poor	1,050,829,851		0.7		2.4	96.8
5	American Cancer Society	1,003,781,897		6.1		22.2	71.6
6	Volunteers of America	929,158,968		8.6		1.9	89.4
7	Dana-Farber Cancer Institute	877,321,613		13.1		1.6	85.2
8	AmeriCares	854,604,824		0.4		0.7	98.8
9	ALSAC—St. Jude Children’s Research Hospital	829,662,076		9.6		16.9	73.4
10	City of Hope	736,176,619		13.7		3.0	83.1

a. Select a scatter diagram with fundraising expenses () on the horizontal axis and program expenses () on the vertical axis.

A.		B.
C.		D.

- Select your answer -ABCDItem 1

Looking at the data, do there appear to be any outliers and/or influential observations?

The scatter diagram - Select your answer -doesdoes notItem 2 indicate potential influential observation(s). If there are potential influential observations enter the number of charity organizations as indicated in the table above separated by commas as needed. If there are no potential influential observations leave the input box blank. For example if you think that the answer is American Red Cross enter 1.

The scatter diagram - Select your answer -doesdoes notItem 4 indicate potential outlier(s). If there are potential influential observations enter the number of charity organizations as indicated in the table above separated by commas as needed. If there are no potential influential observations leave the input box blank. For example if you think that the answer is American Red Cross enter 1.

b. Develop an estimated regression equation that could be used to predict program expenses () given fundraising expenses ().

(to 2 decimals)

c. Does the value for the slope of the estimated regression equation make sense in the context of this problem situation? Enter negative values as negative numbers.

The slope of the estimtaed regression equation is . Thus, for every increase in the amount spent on fundraising the percentage spent on program expenses will - Select your answer -decreaseincreaseItem 9 by ; in other words, just a little under . The - Select your answer -negativepositiveItem 11 slope and value seem to make sense in the context of this problem situation (to 2 decimals).

d. Use residual analysis to determine whether any outliers and/or influential observations are present. Briefly summarize your findings and conclusions. Round to 3 decimals and enter negative value as negative numbers, if necessary.

#	Charity	Standard Residuals	Leverage

1	American Red Cross
2	World Vision
3	Smithsonian Institution
4	Food For The Poor
5	American Cancer Society
6	Volunteers of America
7	Dana-Farber Cancer Institute
8	AmeriCares
9	ALSAC—St. Jude Children’s Research Hospital
10	City of Hope

Observation is an outlier because it has a large standardized residual.

Observation is an influential observation becasuse has high leverage.

Accepted Answer

As per our guidelines, we are allowed to answer 3 sub-parts
 
a. Select a scatter diagram with…