ch5_A1_Sol

# ch5_A1_Sol - Linear Regression Exercise In creating a 4...

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Unformatted text preview: Linear Regression Exercise In creating a 4 year forecast for your company, you want to project future revenue based on historical revenue. Using actual revenue form 2001‐2008, project revenues for 2009 thru 2012 as follows: 1) using the FORECAST function in Excel, and 2) using the TREND function in Excel. Also, 3) create a line graph illustrating actual and projected revenues from 2001 to 2013 for a budget meeting. Projected Revenue (in 000's) Actual Revenue (in 000's) Using FORECAST Using TREND \$ 50,000 \$ 54,000 \$ 62,000 \$ 66,500 \$ 69,000 \$ ,000 76,000 76 \$ 77,000 \$ 87,500 Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Adapted by: SJ, UMUC, 2009 Linear Regression Solution Predicting Values Using FORECAST and TREND Projected Revenue (in 000's) Actual Revenue (in 000's) \$ 50,000 \$ 54,000 \$ 62,000 \$ 66,500 \$ 69,000 \$ 76,000 \$ 77,000 \$ 87,500 Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Using FORECAST Using TREND \$ 90,357 \$ 90,357 \$ 95,381 \$ 95,381 \$ 100,405 \$ 100,405 \$ 105,429 \$ 105,429 Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Revenue (in 000's) \$ 50,000 \$ 54,000 \$ 62,000 \$ 66,500 \$ 69,000 \$ 76,000 \$ 77,000 \$ 87,500 \$ 90,357 \$ 95,381 \$ 100,405 \$ 105,429 Adapted by: SJ, UMUC, 2009 Linear Regression Solution: Chart Revenue (in 000's)* \$120,000 \$100,000 \$80,000 \$60,000 \$40,000 \$20,000 \$‐ 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 * Actual from 2001 ‐ 2008, projected from 2009 ‐ 2012 Adapted by: S. Justin, 2009, Sengupta pg. 216 ...
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