Question

The following table shows a company's annual revenue (in billions of dollars) for 2009 to 2014.

Year	Period (t)	Revenue ($ billions)
2009	1	23.7
2010	2	29.3
2011	3	38.0
2012	4	50.2
2013	5	59.7
2014	6	66.7

(a) Develop a linear trend equation for this time series to forecast revenue (in billions of dollars). (Round your numerical values to three decimal places.)

T_t =

(b)What is the average revenue increase per year (in billions of dollars) that this company has been realizing? (Round your answer to three decimal places.)

$____?____ billion

(c)Compute an estimate of this company's revenue (in billions of dollars) for 2015. (Round your answer to two decimal places.)

$____?____ billion

Answer 1

a.

Sum of X = 12069
Sum of Y = 267.6
Mean X = 2011.5
Mean Y = 44.6
Sum of squares (SSX) = 17.5
Sum of products (SP) = 159.2

Regression Equation = ŷ = bX + a

b = SP/SSX = 159.2/17.5 = 9.097

a = MY - bMX = 44.6 - (9.1*2011.5) = -18254.303

ŷ = 9.097X - 18254.303

b. Here slope value is 9.097

The average revenue increase per year (in billions of dollars) that this company has been realizing is 9.097

c. For x=2015, ŷ = (9.097*2015) - 18254.303=76.15

answered by: anonymous