A linear trend equation for sales of the form was estimated using annual sales d

Question

A linear trend equation for sales of the form was estimated using annual sales data for the period 2006 - 2013 (i.e., t- 2006 2007, ., 2013). The results of the regression are as follows DEPENDENT VARIABLE: QT R-SQUARE F-RATI 14.23 P-VALUE ON F 0.0093 OBSERVATIONS: 8 VARIABLE INTERCEPT 0.7034 PARAMETER STANDARD ESTIMATE 23,024,200 8,122,205 12,045 ERROR T-RATIO P-VALUE -2.83 1.98 0.0298 6075 0.0947 At the 10 percent level of significance, the critical value of the t-statistic is The parameter estimate of a (is, is not) statistically (is, is not) statistically significant. The parameter estimate of b significant. b.The statistical estimates indicate a(n) (upward, downward) units per year trend in sales of In the year 2012, sales are forecasted to be C. units

Explanation / Answer

a) the critical value of t-statistic at 10% level of sifgnificance = l t(0.05,6) l = 1.943

the parameter estimate of a is statistically significant. (because l t-ratio for a l > t-statistic

the parameter estimate of b is statistically significant. (because l t-ratio for b l > t-statistic

b) upward trend

12045 units per year

c) the forecasted sales for 2012 = -23024200+12045*2012 = 1210340 units

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