Question

I have the following data

Week of	Expenses	Revenues	Profit
6-Dec-04	103,084	122,533	19,449
13-Dec-04	99,584	131,036	31,452
20-Dec-04	94,936	137,813	42,877
27-Dec-04	100,757	114,495	13,738
3-Jan-05	102,736	120,579	17,843
10-Jan-05	94,866	182,122	87,256
17-Jan-05	96,158	137,983	41,825
24-Jan-05	97,013	104,668	7,655
31-Jan-05	97,796	117,807	20,011
7-Feb-05	106,315	157,735	51,420
14-Feb-05	92,307	145,685	53,378
21-Feb-05	89,923	129,758	39,835
28-Feb-05	100,546	130,642	30,096
7-Mar-05	99,270	85,895	(13,375)
14-Mar-05	98,632	125,994	27,362
21-Mar-05	100,273	113,194	12,921
28-Mar-05	100,006	127,209	27,203
4-Apr-05	105,531	114,713	9,182
11-Apr-05	92,774	145,468	52,694
18-Apr-05	103,169	151,959	48,790
25-Apr-05	105,794	68,623	(37,171)
2-May-05	98,534	126,485	27,951
9-May-05	97,474	97,000	(474)
16-May-05	102,492	121,350	18,858
23-May-05	105,295	137,074	31,779
30-May-05	99,640	152,589	52,949
6-Jun-05	101,201	153,171	51,970
13-Jun-05	99,726	136,244	36,518
20-Jun-05	96,206	101,012	4,806
27-Jun-05	100,878	156,135	55,257
4-Jul-05	99,439	125,567	26,128
11-Jul-05	95,537	154,901	59,364
18-Jul-05	105,354	128,439	23,085
25-Jul-05	89,897	116,745	26,848
1-Aug-05	91,257	168,639	77,382
8-Aug-05	104,675	148,706	44,031
15-Aug-05	93,216	141,687	48,471
22-Aug-05	102,284	141,879	39,595
29-Aug-05	103,959	106,889	2,930
5-Sep-05	97,823	169,328	71,505
12-Sep-05	97,765	126,747	28,982
19-Sep-05	108,032	154,728	46,696
26-Sep-05	101,433	162,576	61,143
3-Oct-05	96,548	138,661	42,113
10-Oct-05	93,295	158,689	65,394
17-Oct-05	100,227	135,165	34,938
24-Oct-05	97,876	112,240	14,364
31-Oct-05	102,985	118,904	15,919
7-Nov-05	100,099	141,778	41,679
14-Nov-05	102,245	161,104	58,859
21-Nov-05	102,353	140,226	37,873
28-Nov-05	105,811	133,108	27,297

1. Having thought about Mr. James’s suggestion, you consider several options as an estimate of lost profits.  These include 1) the full year, 2) the last six months only, 3) a weighted average that gives twice the weight to the last six months as to the first six months, or 4) some other weighted average.  Which method do you think gives the most accurate estimate of lost profits?

Answer 1