Use the information in Exhibit 15 to project the change in gross margin for Home Depot assuming the preceding margin change was -1.5% and the margin change four quarters (one year) ago was +2%.

Exhibit 14 shows the autocorrelations of the residuals from an AR(1) model fit to the changes in the gross profit margin (GPM) of the Home Depot, Inc. EXHIBIT 14 Autocorrelations of the Residuals from Estimating the Regression GPMt=0.00060.3330GPMt1+t,1Q19924Q2001(40 Observations) Exhibit 15 shows the output from a regression on changes in the GPM for Home Depot, where we have changed the specification of the AR regression. EXHIBIT 15 Change in Gross Profit Margin for Home Depot, 1Q 1992-4Q 2001