expected value question help

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April 22, 2011 at 5:28 pm #48192
saleema
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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 (10×19 + 150 = 340).
I do not understand why you multiply by ‘19’ because it says in the question 19 is Q1.
Any ideas?
🙂
April 25, 2011 at 6:37 pm #81053
John Moffat
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- Topics: 57
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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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