The following linear trend equation was developed for annual sales from 2005 to 2009, with 2005 as the base year. Ŷ = 500 + 60t (in $thousands). What are the estimated sales for 2010 (in $thousands)?
A) $500
B) $860
C) $1,040
D) $1,100

Question

Quizplus · Accepted Answer

The estimated sales for 2010 can be calculated by plugging t = 5 (since 2010 is the fifth year after the base year 2005) into the linear trend equation: Ŷ = 500 + 60t = 500 + 60(5) = $860,000.

The Following Linear Trend Equation Was Developed for Annual Sales