The following linear trend equation was developed for annual sales from 1995 to 2001 with 1995 the base or zero year. ŷ = 500 + 60t ($000). What are the estimated sales for 2005 ($000)?
A) $500
B) $560
C) $600
D) $1,040
E) $1,100

Question

Quizplus · Accepted Answer

The base year is 1995, so 2005 is 10 years after the base year. Substitute t = 10 into the equation: ŷ = 500 + 60(10) = 500 + 600 = 1,100.

The Following Linear Trend Equation Was Developed for Annual Sales