The Walt Disney Company is a large entertainment firm with three businesses segments: films and TV, merchandise, and theme parks and resorts TPR. Like many companies Disney provides quarterly reports of the total amounts of money taken in by each of these lines of business. Expansion of facilities at the two US theme parks (Disney land in California and Walt Disney World in Florida) and licensing and investments income from parks in Japan and France have lead to a steady growth in total TPR revenue. The following listing of quarterly revenues (in million of dollars) shows the revenue growth over the last decade reaching almost $1 billion per quarter at the end of Disney’s 1992 fiscal year. (Disney’s fiscal year begins Oct, so the quarter ending in Dec 1992 is the first quarter of Disney’s 1992 fiscal year) an analyst looking at the success would first note the sum of the increase can be attributed to inflation. Accordingly the revenue are also given in 1982. this is accomplished by dividing the actual revenues by the US department of commerce’s GNP deflator and multiplying the results by 100. (see attached Excel sheet or the table and numbers).

1. Plot the data in 1982 dollars and find the least square trend line what fraction of the variability in revenue is accounted for by the trend alone?

1. As might be expected there is a strong seasonal pattern to the TPR revenue with the Dec quarter showing the lowest revenue and the best results usually reported for the Sep quarter. Find the quarterly seasonal indices for the revenues in 1982 dollars and use them to desesonalize those revenue.
2. Find the least square trend line deseaonalized data.
3. We cannot directly compare the R2 values for the trend lines in parts (A) and (c) because the first tells what fraction of variation in the actual revenues is explained by the trend while the second tells what fraction of variation in the deseasonlized revenue is explained by the trend. To see how much of the variation and the actual revenues is extrend. To see how much of the variation in the actual revenues is explained by the trend and the seasonality proceed as follow:
   1. Use the deseasonalized trend line t predicts the deseasonalized revenue for all 40 quarters.
   2. reseasonalize those forecast by multiplying by the appropriate seasonal indices and divding by a 100.
   3. For each of the 40 quarters subtract the actual revenue from the reseasonalized forecast to find the error in the forecast.
   4. Square these errors and sum them up, call the result SSE.
   5. let SST be the total sum of squares for the trend line in part A. the fraction of the variation in the actual revenue explained by the trend and the seasonality is 1-SSE*/SST how much more of the variability and the quarterly revenue is explained by taking the seasonality into account.
4. From October 1990 through Sep 1991 attendance at theme parks was diminished by the war in the Persian golf. When fears of terrorist attacks kept many potential visitors at home and by a recession in the US economy. What kind of variation are there?

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