Franchise taxes are levied on businesses that gain a franchise right of doing business in a jurisdiction's territory. The data in Table 1.1 are franchise tax revenues in the city of Oviedo, Florida, from Year 1 to Year 9.

Table 1.1. Franchise Taxes in Oviedo

Year Revenues ($)

1 12,455,000

2 13,525,000

3 14,091,000

4 15,743,000

5 16,308,000

6 17,088,000

7 18,287,000

8 18,787,000

9 19,635,000

During forecasting, you are informed that Spirit's (the local telephone service provider) current franchise contract with the city ends in Year 11. The city will seek a 13 percent franchise tax increase from the previous year basis from Spirit in Year 12. The franchise tax revenues from Spirit during the last nine years are shown in Table 1.2. Forecast the franchise tax revenues of Year 10 to 12 using SMA, TMA, and regression.

Table 1.2. Franchise Taxes from Spirit in Oviedo

Year Revenues ($)

1 3,824,000

2 4,202,000

3 3,837,000

4 4,536,000

5 5,732,000

6 6,126,000

7 5,190,000

8 6,800,000

9 7,162,000