Short Answer Question 4:

Your firms last five daily net cash flows are shown below, where Day 5 is yesterday. Your boss has tasked you with determining whether a 2-day or 3-day moving average net cash flow forecast best predicts your firms daily net cash flows. Show your quantitative analysis and provide a brief discussion of your results and inferences.

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