Reference no: EM1320395

Question: A company's sales [in million units], selling expenses [in $million], and price [in $/unit] data are provided in the table below.

[A] Forecast the company's sales if the company increases its selling expenses to $10 million and its price to $8.5/unit.

[B] Calculate the sample regression line, where sales is the dependent variable and selling expenses and price are the independent variable.

[C]If the company's objective is maximizing net revenue (total revenue minus selling expenses), which of the three following options should be accepted: 

(a) increase selling expenses to $10 million and price to $8.5/unit, 

(b) increase selling expenses to $10 million and price to $9.0/unit, and 

(c) increase selling expenses to $11 million and price to $8.5/unit.

Millions of units (Y)	$ million (X1)	$ (X2)
Sales	Selling expense	Price
6000	2	0.00
4000	1	1.00
16000	8	2.00
10000	5	3.00
12000	6	4.00
8000	4	5.00
12000	7	6.00
16000	9	7.00
14000	8	8.00