Solved

A CPA Firm Has Been Using the Following Equation to Predict

Question 152

Essay

A CPA firm has been using the following equation to predict annual demand for tax audits: Yt = 55 + 4t. Demand for the past few years is shown below. Is the forecast performing as well as it might? Explain.  Year 234567 Demand 606569768585\begin{array} { l l l l c l l } \text { Year } & 2 & 3 & 4 & 5 & 6 & 7 \\\hline \text { Demand } & 60 & 65 & 69 & 76 & 85 & 85 \\\end{array}

t Demand  Forecast DFe226063 393656724469712257675+1168579+63678583+24\begin{array} { l l l l c l l } \mathrm { t } & \text { Demand } & \text { Forecast } & \mathrm { D } - \mathrm { F } & \mathrm { e } ^ { 2 } & \\\hline 2 & 60 & 63 &\ - 3 & 9 & \\3 & 65 & 67 & - 2 & 4 & \\4 & 69 & 71 & - 2 & 2 & \\5 & 76 & 75 & + 1 & 1 & \\6 & 85 & 79 & + 6 & 36 & \\7 & 85 & 83 & + 2 & 4 &\end{array}

Correct Answer:

verifed

Verified

MSE = 11/6 and s =blured image = 3.41. Even with ± 2...

View Answer

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents