If the least squares equation for sales data going from 2004 to 2008 is Ŷ = 10 + 1.3t (in $millions), what is the value of t and the forecast for 2010?
A) t = 6, Ŷ = 17.8
B) t = 0, Ŷ = 10.0
C) t = 7, Ŷ = 19.1
D) t = 10, Ŷ = 0.0

Question

Quizplus · Accepted Answer

According to the given equation, the coefficient of t is 1.3, which means that sales are increasing at a rate of $1.3 million per year.

To find the value of t for the year 2010, we need to subtract 2004 from 2010:

t = 2010 - 2004 = 6

Now we can use the least squares equation to forecast sales for 2010:

Ŷ = 10 + 1.3t 
Ŷ = 10 + 1.3(6) 
Ŷ = 10 + 7.8 
Ŷ = 17.8

Therefore, the answer is C: t = 7, Ŷ = 19.1

If the Least Squares Equation for Sales Data Going from 2004