Here are earnings per share for two companies by quarter fromthe first quarter of three years ago through the second quarter ofthis year. Forecast earnings per share for the rest of this yearand next year. Use exponential smoothing to forecast the thirdperiod of this year, and the time series decomposition method toforecast the last two quarters of this year and all four quartersof next year. (It is much easier to solve this problem on acomputer spreadsheet so you can see what is happening.)
EARNINGS PER SHARE
QUARTERCOMPANY ACOMPANY B3 years agoI$ 1.76$ 0.23II2.320.27III1.250.29IV1.210.262 years agoI1.410.28II1.980.37III1.280.36IV0.390.37last yearI0.240.25II–0.19(loss)0.36III–0.94(loss)0.51IV0.250.50this yearI–1.73(loss)0.35II0.360.50
a. For the exponential smoothing method,
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