A company has recorded annual sales for the past 14 years and found the following linear trend model: = 5.23 + 144.60t.This means that:
A)on average sales are increasing by of 5.23 per year.
B)on average sales are increasing by of 144.6 per year.
C)there is a seasonal component in the data.
D)sales in year 1 were 5.23.

Question

A company has recorded annual sales for the past 14 years and found the following linear trend model:  = 5.23 + 144.60t.This means that:
A)on average sales are increasing by of 5.23 per year. 
B)on average sales are increasing by of 144.6 per year. 
C)there is a seasonal component in the data. 
D)sales in year 1 were 5.23.

Quizplus · Accepted Answer

The coefficient 144.60 indicates that on average, sales are increasing by 144.60 per year. The intercept 5.23 represents the estimated sales in year 0, not year 1. There is no indication of a seasonal component in the model. Therefore, the correct choice is B.

A Company Has Recorded Annual Sales for the Past 14