expected value question help — OpenTuition Forums

Ssaleema15y ago

hi can someone please help me with this question

A toy company is preparing its budgets for next year. The following regression equation has been found to be a reliable estimate of the toy companies deseasonalised sales in units:

y = 10x+150

Where y = total units and x refers to the accountancy period.

What is the expected figure for actual sales in accounting period 19 (which is Q1)?

A) 255
:) 315
C) 340

The answer in the book says that it is C (10x19 + 150 = 340).

I do not understand why you multiply by ‘19’ because it says in the question 19 is Q1.

Any ideas?

:)

John MoffatTutor15y ago#1

But it says that it is accountancy period 19, and x in the regression equation is the accountancy period.

The fact that it happens to be quarter 1 of a particular year has nothing to do with it (unless the question also tells you about seasonal variations).

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