The Municipal Government has asked you to forecast the sales tax revenue it will collect...
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Finance
The Municipal Government has asked you to forecast the sales tax revenue it will collect in 2017, 2018 and 2019. Data on revenue in recent years is presented below.
Year
Q1
Q2
Q3
Q4
TOTAL
2012
695
788
809
1,302
$3,594
2013
896
941
1,018
1,677
$4,532
2014
1,037
929
1,353
2,090
$5,409
2015
1,067
1,081
1,574
2,143
$5,865
2016
1,147
1,161
1,683
2,372
$6,362
*In thousands
You see an upward trend in the data, and you decide to try the moving average method or regression models to develop your forecast.
a. Estimate annual sales tax revenue for 2017, 2018 and 2019 using a moving average 3-day (MA3) model. Please clearly show the process you use to come up with your estimates. (5 points)
b. Estimate annual sales tax revenue for 2017, 2018 and 2019 using a moving average 4-day (MA4) model. Please clearly show the process you use to come up with your estimates. (5 points)
c. Using one of the methods, forecast the quarterly sales tax revenue for 2017. Clearly show the process you use to come up with your estimates. (Hint: consider average or moving average by quarter, or ratio / percent.) (5 points)
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