Exercise

# Using Regression to Test the Projections

After visually inspecting the data, you decide that you also want to use regression analysis to determine whether there is a statistically significant shift in the trend from the historical revenues to the projected revenues. Recall you have to create a trend (`trend`

) and a shift (`shift`

) variable.

For this exercise, the revenue data you created in the prior exercise is stored in the `rev`

object. In that data, you will have two time series: historical revenues (`hist_rev`

) and projected revenues (`proj_rev`

). Historical revenues has positive values for the first 10 years of historical data and 0 for projection period. Projected revenues has 0 for the first 10 years and positive values during the projection period.

Instructions

**100 XP**

- Create a single revenue series that adds both historical and projected data.
- Add a trend variable to
`rev_all_df`

using`seq()`

. - Add a shift variable to
`rev_all_df`

using`ifelse()`

. - Regress
`rev_all`

on`trend`

and`shift`

.