Period (f) Еxpense (%) 1 13.9 2 12.2 3 10.5 4 10.4 11.5 6 10.0 7 8.5
The Seneca Children’s Fund (SCC) is a local charity that runs a summer camp for disadvantaged
children. The fund’s board of directors has been working very hard over recent
years to decrease the amount of overhead expenses, a major factor in how charities are
rated by independent agencies. The following data show the percentage of the money SCC
has raised that was spent on administrative and fund-raising expenses over the last seven
years.
a. Construct a time series plot. What type of pattern exists in the data?
b. Use simple linear
MSE for this time series.
c. Forecast the percentage of administrative expenses for year 8.
d. If SCC can maintain its current trend in reducing administrative expenses, how long
will it take SCC to achieve a level of 5 percent or less?
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