Question

Suppose a firm has had the following historic sales figures. Year: 2016 2017 2018 2019 2020 Sales $1,440,000 $1,670,000 $1,590,000 $2,000,000 $1,810,000 What would be the forecast for next year’s sales using regression to estimate a trend?

Next year’s sales?

Answer 1

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- 2x % Cut FD FE FE FG FH L ED FKE 67 70 4 STATS - Microsoft Excel (Product Activation Failed) File Home Insert Page Layout Formulas Data Review View Add-Ins Σ AutoSum : A Calibri -11AA = = = Dr Wrap Text General E Copy Fill 2 m Paste B I U B- SF A Merge Merge & Center - Center $ -% % Format Painter 4:0 .00 . Conditional Format Cell Insert Delete Format Sort & Find & Formatting as Table Styles 2 Clear Filter Select Clipboard Font Alignment Number Styles Cells Editing EY82 EX EY E Z FA FB FC 66 Y YEAR YEAR SALES STEP 1 SIMPLE REGRESSION LINE = Y = a +bX 68 2016 1440000 69 2017 1670000 STEP 2 X BAR 2.00 [=AVERAGE(EY47:EY52)] 2018 2 1590000 Y BAR 1702000.00 I=AVERAGE(EZ47:EZ52)] 71 2019 3 2000000 SLOPE (b) 107000.00 (=SLOPE(EZ47:E251, EY47:EY51)] 72 2020 1810000 73 Y = a + b(X) 74 WE HAVE ASSUMED Y BAR = a + b(X BAR) 75 YEAR 2016 = 0 TO FIND OUT , WE HAVE TO PUT VALUES OF XBAR, Y BAR AND SLOPE IN EQUATION 76 SO 2017 = 1 1702000 = a + (107000) (2) 77 AND SO ON 1488000 78 79 STEP 4 REGRESSION EQUATION : Y = 1488000 + 107000(X-2016) 80 81 GIVEN YEAR = 2021 82 ANSWER FORECASTED SALES = Y = 1488000 + 107000(2021-2016) = 2023000 83 84 P V FV DIVIDEND EMV MEAN STDV assignment DEAR Sheet2 COV TIME SERIES corr REGRESSION range CAMERA TREND freg_MATRIX INTERVAL, NORMAL HYPOTHI Rea ferences BO 130% 2. 9 * ENG a = H 0- 27-11-2019