Coyote Cable Has Been Experiencing an Increase in Cable Service

question 29

Essay

Coyote Cable has been experiencing an increase in cable service subscribers in recent months due to increased advertising and an influx of new residents to the region. The number of subscribers (in 1000s) for the last 16 months is as follows: $$\begin{array} { l l l l l l } \text { Month } & \text { Sales } & \text { Month } & \text { Sales } & \text { Month } & \text { Sales } \\1 & 12.8 & 7 & 20.6 & 12 & 23.8 \\2 & 14.6 & 8 & 18.5 & 13 & 25.1 \\3 & 15.2 & 9 & 19.9 & 14 & 24.7 \\4 & 16.1 & 10 & 23.6 & 15 & 26.5 \\5 & 15.8 & 11 & 24.2 & 16 & 28.9\end{array}$$ ​
Using simple linear regression, forecast the number of subscribers for months 17, 18, 19, and 20.

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Definitions:

Equipment

Tangible assets used in operations, such as machinery or office machines, which have a useful life longer than a year.

Straight-Line Method

A depreciation method that allocates an equal amount of the cost of an asset to each year of its useful life.

Fully Depreciated

A term used when a fixed asset has been depreciated to its salvage value and no longer carries a cost on the balance sheet except its possible residual value.

Loss on Disposal

Represents the financial loss a company incurs when it disposes of an asset for less than its carrying value.