Given the record of weekly cash flows below, calculate the four-week moving averages for this data for a forecast of week 6.

Week 1 $100,000
Week 2 $125,000
Week 3 $145,000
Week 4 $130,000
Week 5 $110,000

Question

Given the record of weekly cash flows below, calculate the four-week moving averages for this data for a forecast of week 6.

Week 1 $100,000
Week 2 $125,000
Week 3 $145,000
Week 4 $130,000
Week 5 $110,000

BlackTom AI · Accepted Answer

To forecast week 6 using a four-week moving average, we take the most recent four weeks of actual data preceding week 6 and compute their average.

First, identify the four weeks before week 6: weeks 2, 3, 4, and 5 have cash flows of 125,000; 145,000; 130,000; and 110,000 respectively.

Next, sum these four values: 125,000 + 145,000 + 130,000 + 110,000 = 510,000.

Then, divide by 4 to obtain the four-week moving average: 510,000 ÷ 4 = 127,500.

Thus, the four-week moving average forecast for week 6 is $127,500.

Now evaluate the provided options:
- Option $127,500: This exactly matches the calculated moving average, so it is correct.
- Option $122,000: This would result from averaging a different set of weeks (or miscounting), such as using only three or misplacing a value, which is not consistent with a four-week moving average.
- Option $128,333: This would occur if one had computed an average of four weeks that sum to about 513,332, which does not correspond to any valid four-week subset here.
- Option $129,290: This value does not align with the arithmetic of any four-week subset from the given data and thus is incorrect.

FA25-BL-BUS-F307-1134 Practice Question Set: Final Exam- Requires Respondus LockDown Browser

Given the record of weekly cash flows below, calculate the four-week moving averages for this data for a forecast of week 6. Week 1 $100,000 Week 2 $125,000 Week 3 $145,000 Week 4 $130,000 Week 5 $110,000

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