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ANSWER C AND D WITH YOUR WORK.

Expert Q&A Done 2. Forecasting (Total 25 points) 788 Columbus Municipal Government has asked you to forecast the sales tax revenue it will collect in Year 6. Year 7 and Year 8. Data on revenue in recent years is presented below. Year Q1 Q2 Q3 04 TOTAL Year 1 695 809 1,302 $3,594 Year 2 896 941 1,018 1,677 $4,532 Year 3 1,037 929 1,353 2,090 $5,409 Year 4 1,067 1,081 1,574 2.143 $5,865 Year 5 1,147 1,161 1,683 2,372 $6,362 "In thousands The annual data are graphed below: Sales Tax Revenues in thousands Done Expert Q&A The annual data are graphed below: Sales Tax Revenues in thousands $7,000 S6,000 55,000 56,362 35,865 54532 $4,000 53.594 $3,000 $2,000 51,000 SO Year 1 Year 2 Year Year 4 Year 5 c. Forecast the expected annual sales tax revenue for Year 6. Year 7 and Year 8 using the trend regression model. (5 points) d. Do you recommend that the trend regression model be employed in this case? Why or why not? (5 points) Expert Q&A Done 2. Forecasting (Total 25 points) 788 Columbus Municipal Government has asked you to forecast the sales tax revenue it will collect in Year 6. Year 7 and Year 8. Data on revenue in recent years is presented below. Year Q1 Q2 Q3 04 TOTAL Year 1 695 809 1,302 $3,594 Year 2 896 941 1,018 1,677 $4,532 Year 3 1,037 929 1,353 2,090 $5,409 Year 4 1,067 1,081 1,574 2.143 $5,865 Year 5 1,147 1,161 1,683 2,372 $6,362 "In thousands The annual data are graphed below: Sales Tax Revenues in thousands Done Expert Q&A The annual data are graphed below: Sales Tax Revenues in thousands $7,000 S6,000 55,000 56,362 35,865 54532 $4,000 53.594 $3,000 $2,000 51,000 SO Year 1 Year 2 Year Year 4 Year 5 c. Forecast the expected annual sales tax revenue for Year 6. Year 7 and Year 8 using the trend regression model. (5 points) d. Do you recommend that the trend regression model be employed in this case? Why or why not? (5 points)

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