Problem 1:

Your firms last five daily net cash flows are shown below, where Day 5 represents yesterday. Your boss has tasked you with assessing the accuracy of a 2-day moving average net cash flow forecast using the Mean Absolute Deviation (MAD) metric. Use the following data to calculate the MAD for a 2-day moving average net cash flow forecast for this 5-day sample of data.

Day	Net Cash Flow
1	15,000
2	17,000
3	13,000
4	20,000
5	14,000

Problem 2: Use the information from the table above to determine whether a 3-day moving average net cash flow forecast would be a more accurate forecasting tool. Base your answer on MAD.