Carolina Wood Products, Inc., a major manufacturer of household furniture, is interested in predicting expenditures on furniture (FURN) for the entire United States. It has the following data by quarter for 1998 through 2007:

a.  Prepare a naive forecast for 2017Q1 based on the following model:

b. Estimate the bivariate linear trend model for the data where TIME = 1 for 2007Q1 through TIME = 40 for 2016Q4.

c. Write a paragraph in which you evaluate this model, with particular emphasis on its usefulness in forecasting.

d. Prepare a time-trend forecast of furniture and household equipment expenditures for 2017 based on the model in part (b).

e. Suppose that the actual values of FURN for 2017 were as shown in the following table. Calculate the MAPE for both of your forecasts and interpret the results. (For the naive forecast, there will be only one observation, for 2017Q1.)