SCENARIO 16-14 a Contractor Developed a Multiplicative Time-Series Model to Forecast

question 87

Multiple Choice

SCENARIO 16-14 A contractor developed a multiplicative time-series model to forecast the number of contracts in future quarters, using quarterly data on number of contracts during the 3-year period from 2011 to 2013.The following is the resulting regression equation: where is the estimated number of contracts in a quarter. X is the coded quarterly value with X = 0 in the first quarter of 2011. is a dummy variable equal to 1 in the first quarter of a year and 0 otherwise. Q is a dummy variable equal to 1 in the second quarter of a year and 0 otherwise. is a dummy variable equal to 1 in the third quarter of a year and 0 otherwise.
-Referring to Scenario 16-14, to obtain a forecast for the first quarter of 2014 using the model, which of the following sets of values should be used in the regression equation?

• A)X = 12,
• B)X = 12,
• C)X = 13, Q
• D)X = 13,

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Definitions:

Taxable Income

The portion of an individual’s or corporation's income that is subject to taxes by the government.

Average Tax Rate

The ratio of the total taxes paid to the overall income, found by dividing the aggregate amount paid in taxes by the total income.

Income Tax Schedule

A chart or formula used to determine the tax rate applied to various levels of income.

Progressive

Describes a taxation system where the tax rate increases as the taxable amount increases, aiming to distribute the tax burden more equitably.