Please show all work as needed for full credit! Thanks! A consulting firm estima

Question

Please show all work as needed for full credit! Thanks!

A consulting firm estimates the following quarterly sales forecasting model Q. = a + bt + cD The equation is estimated using quarterly data from 2005/-2015/(t-1,.., 43). The variable D is a dummy variable for the second quarter where D = 1 in the second quarter, and 0 otherwise The results of the estimation are: F-RATIO 127.5 ERROR 9.32 0.55 0.71 P-VALUE ON F 0.0001 T-RATIO P-VALUE 2.41 3.38 2.82 DEPENDENT VARIABLE: QT R-SQUARE 0.8644 PARAMETER STANDARD OBSERVATIONS: 43 VARIABLE ESTIMATE 22.5 1.86 2.0 0.0201 0.0016 0.0075 INTERCEPT 1.Given the above, at the 1 percent level of significance, is there a statistically significant trend in sales? Yes, because 0.00160.01. No, because 0.0016>0.001. Yes, because 0.55>0.01. Yes, because 1.86> 0.01. both c and d b. 2. Given the above, these estimates indicate that the second quarter change in sales is 22.5 units higher in the second quarter than in the other three quarters 1.86 units higher in the second quarter than in the other three quarters 2.00 units higher in the second quarter than in the other three quarters. 24.5 units higher in the second quarter than in the other three quarters b. 3.Using the estimated trend line above, what is the predicted level of sales in 20167? 110.06 106.20 104.34 102.2 none of the above

Explanation / Answer

1) (a)

EXPLANATION : Here the 'P' Value of trend sales = 0.0016 <0.01

Hence it is significant at 1% level of significance

2) (b)

Increased by 1.86 units

3) (c)

EXPLANATION:

Wehave Qt = 22.5+1.86t

Therefore the estimated level of sales in 2016I is given by

Qt = 22.5+1.86(44) = 104.34

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