SCENARIO 16-12 a Local Store Developed a Multiplicative Time-Series Model

question 113

Multiple Choice

SCENARIO 16-12 A local store developed a multiplicative time-series model to forecast its revenues in future quarters, using quarterly data on its revenues during the 5-year period from 2009 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 2008. is a dummy variable equal to 1 in the first quarter of a year and 0 otherwise. 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 16-12, to obtain the fitted value for the first quarter of 2013 using the model, which of the following sets of values should be used in the regression equation?

• A)X = 16,
• B)X = 16,
• C)X = 17,
• D)X = 17,

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Definitions:

Common Stock

A type of equity ownership in a corporation, representing a claim on part of the company's profits and a right to vote on corporate matters.

Dividends

Payments made to shareholders out of a company's profits.

Equity Method

This is a method in accounting where investments in external companies are initially logged at their acquisition cost, then later altered to account for the owner's share in the profits or losses of the company invested in.

Intra-entity Inventory

Inventory transactions that occur within the same company, involving transfers between departments or subsidiaries, not affecting the overall financial position.