Exhibit 2-2
A small sporting goods company is considering investing $2000 in a project at the start of year 1 that will produce volleyballs over the next five years. The company plans to produce and sell 200 volleyballs in the first year, and expects that volume to grow by 10% each year thereafter. The unit selling price forecast the company has developed is $20 in year 1, $22 in year 2, $25 in year 3, $28 in year 4, and $31.50 in year 5. Variable costs are forecast to be $15 per unit produced, and there will be a fixed overhead cost in each year of $500. (Unless otherwise indicated, assume that all cash flows occur at the end of the year.)
-[Part 2] Refer to Exhibit 2-2.Use the same scatterplot constructed for the previous question,fit an exponential trendline to the data.What are the coefficients of the exponential model,and what is the MAPE of an exponential model forecast,compared to the company's forecast

Question

Exhibit 2-2
A small sporting goods company is considering investing $2000 in a project at the start of year 1 that will produce volleyballs over the next five years. The company plans to produce and sell 200 volleyballs in the first year, and expects that volume to grow by 10% each year thereafter. The unit selling price forecast the company has developed is $20 in year 1, $22 in year 2, $25 in year 3, $28 in year 4, and $31.50 in year 5. Variable costs are forecast to be $15 per unit produced, and there will be a fixed overhead cost in each year of $500.  (Unless otherwise indicated, assume that all cash flows occur at the end of the year.)
-[Part 2] Refer to Exhibit 2-2.Use the same scatterplot constructed for the previous question,fit an exponential trendline to the data.What are the coefficients of the exponential model,and what is the MAPE of an exponential model forecast,compared to the company's forecast

Quizplus · Accepted Answer

The Answer of Exhibit 2-2
A small sporting goods company is considering investing $2000 in a project at the start of year 1 that will produce volleyballs over the next five years. The company plans to produce and sell 200 volleyballs in the first year, and expects that volume to grow by 10% each year thereafter. The unit selling price forecast the company has developed is $20 in year 1, $22 in year 2, $25 in year 3, $28 in year 4, and $31.50 in year 5. Variable costs are forecast to be $15 per unit produced, and there will be a fixed overhead cost in each year of $500.  (Unless otherwise indicated, assume that all cash flows occur at the end of the year.)
-[Part 2] Refer to Exhibit 2-2.Use the same scatterplot constructed for the previous question,fit an exponential trendline to the data.What are the coefficients of the exponential model,and what is the MAPE of an exponential model forecast,compared to the company's forecast

Exhibit 2-2 a Small Sporting Goods Company Is Considering Investing $2000 in $2000