Kamath-Meier Corporation's CFO Uses This Equation,which Was Developed by Regressing

Kamath-Meier Corporation's CFO uses this equation,which was developed by regressing inventories on sales over the past 5 years,to forecast inventory requirements: Inventories = $22.0 + 0.125(Sales) .The company expects sales of $400 million during the current year,and it expects sales to grow by 30% next year.What is the inventory forecast for next year? All dollars are in millions.

A) $74.6
B) $78.5
C) $82.7
D) $87.0
E) $91.4

Correct Answer:

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