Regression analysis is a statistical method used to examine relationships between variables and make predictions.
To estimatesales tax revenue, a CGFM can use regression to analyze how population growth, housing, and employment trends correlate with tax revenue over time.
Explanation of Answer Choices:
A. Regression analysis: Correct. This method uses historical and predictive data to model the relationship between variables (e.g., population growth and sales tax revenue).
B. Cash flow analysis: Focuses on analyzing cash inflows and outflows, not predicting revenue based on external factors.
C. Payback analysis: Used to calculate the time needed to recover an investment, unrelated to tax revenue estimation.
D. Flow charting: Used to visualize processes, not for predictive analytics.
[:, Association of Government Accountants (AGA),Predictive Analytics in Public Sector Finance., U.S. Census Bureau,Data Analytics for Revenue Forecasting., ]
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