Newark (population 278, 427), New Jersey, has experienced rapid growth over the past decade. The general fund revenue has grown for the last decade from $6.7 million to $24.7 million. However, annual revenue growth has slowed recently from 20 percent a decade ago to an average of under 5 percent for the past several years. During this time, the intergovernmental revenue from the state and federal government has grown but become increasingly unstable. Moreover, the towns fiscally conservative leadership has been unwilling to raise property taxation significantly. The service demand increase and revenue growth decrease have given impetus to the need for enhanced forecast accuracy, particularly in the utility taxes, which have ranged between 15 percent and 18.5 percent of general revenue over the past ten years. The annual actual utility tax receipts for the past ten years are shown below.

Utility Taxes in Newark, NJ

Year	Revenues ($)
1	842,387
2	1,665,430
3	1,863,296
4	2,063,103
5	2,905,717
6	2,994,785
7	3,281,836
8	3,766,661
9	3,907,110
10	4,063,555
11	4,666,867
12	5,018,045
13	5,369,223

Questions 1) Plot the data above in a time trend model. What do you observe in terms of the trend of the data?

2) Forecast the utility revenue for the next 3 years by making estimates using your judgment.

3) Forecast the utility revenue for the next 3 years by using the simple average method.

4) Forecast the utility revenue for the next 3 years by using the moving average method. Use MA3 and MA5

5) Forecast the utility revenue for the next 3 years by using regression analysis.

6) Nobel-prize-winning economist Kenneth Boulding said, All forecasts are wrong, including this one. How would you respond to him?