SCENARIO 16-9 Given Below Are EXCEL Outputs for Various Estimated Autoregressive Models

question 45

Multiple Choice

SCENARIO 16-9
Given below are EXCEL outputs for various estimated autoregressive models for a company's real operating revenues (in billions of dollars) from 1989 to 2012.From the data,you also know that the real operating revenues for 2010,2011,and 2012 are 11.7909,11.7757 and 11.5537,respectively.
First-Order Autoregressive Model:
Second-Order Autoregressive Model:

-Referring to Scenario 16-9,if one decides to use the Third-Order Autoregressive model ,what will the predicted real operating revenue for the company be in 2015?

• A)$11.59 billion
• B)$11.68 billion
• C)$11.84 billion
• D)$12.47 billion

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Definitions:

Variable Manufacturing Costs

Expenses that change in proportion to the manufacturing output, including costs related to direct labor, materials, and manufacturing overhead that fluctuates with production volume.

Operating Income

Earnings from a company's core business operations, excluding expenses and revenues from non-operating activities.

Fixed Overhead

The set costs associated with operating a business that does not change in relation to production volume, such as rent, salaries, and insurance.

Administrative Costs

Expenses related to the general operations of a business, such as office supplies, management salaries, and utilities, which do not directly tie to specific product or service production.