Exhibit 11.1 The Following Questions Use the Data Below

question 102

Multiple Choice

Exhibit 11.1
The following questions use the data below.
Honest Al's Used Cars wants to predict how many cars are sold each month. He has collected data for 12 months. He needs your help in analyzing this data using moving averages.
-Refer to Exhibit 11.1. What Excel function will compute the root mean squared error in cell C18 of the spreadsheet?

• A) =SUMXMY2(B7:B14,C7:C14)
• B) =SQRT(SUMXMY2(B3:B14,C3:C14)/COUNT(C3:C14))
• C) =SUMXMY2(B7:B14,C7:C14)/COUNT(C7:C14)
• D) =SQRT(SUMPRODUCT(B7:B14,C7:C14)/COUNT(C7:C14))

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Definitions:

Useful Life

The expected period over which an asset is anticipated to be economically usable by one or more users.

Double-Declining-Balance Method

An accelerated depreciation method that counts the depreciation of tangible assets at twice the normal rate.

Residual Value

The estimated value of an asset at the end of its useful life, often considered for depreciation purposes.

Depreciation

An accounting method of allocating the cost of a tangible asset over its useful life, representing how much of the asset's value has been used up.