TABLE 16-11
Business Closures in Laramie, Wyoming from 1989

question 114

Short Answer

TABLE 16-11
Business closures in Laramie, Wyoming from 1989 to 1994 were:
$$\begin{array} { l l } 1993 & 10 \\1994 & 11 \\1995 & 13 \\1996 & 19 \\1997 & 24 \\1998 & 35\end{array}$$ Microsoft Excel was used to fit both first-order and second-order autoregressive models, resulting in the following partial outputs:
$\text {SUMMARY OUTPUT - 2\(^ { \text {nd } }\)Order M odel}$
$\text {Coefficients}$
$\begin{array}{ll}\text { Intercept } & -5.77 \\\text { X Variable } 1 & 0.80 \\\text { X Variable 2 } & 1.14\end{array}$

$\text {SUMMARY OUTPUT - st Order Model \(^ { \text {st } }\) OP}$
$\text {Coefficients}$
$\begin{array}{cc}\text { Intercept } & \mathbf{- 4 . 1 6} \\\text { XVariable } 1 & 1.59\end{array}$
-Referring to Table 16-11, the value of the MAD for the second-order autoregressive model is ____.

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Definitions:

Straight-Line Method

A method of calculating depreciation by evenly allocating the cost of an asset over its useful life.

Effective Interest Method

A technique used in accounting to allocate the interest expense or income of a financial instrument over its lifespan in a way that results in a constant rate on the carrying amount.

Bonds Payable

Long-term liabilities representing a company's commitment to pay a specified amount of money at certain future dates for funds borrowed.

Interest Expense

The expense an entity faces for using borrowed capital, recorded as a non-operating cost on the income statement.