What is your forecast of company year-end inventory level

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Reference no: EM131918916

Quantitative Problem: Jasper Jewelry has $130 million in sales. The company expects that its sales will increase 5% this year. Jasper's CFO uses a simple linear regression to forecast the company's inventory level for a given level of projected sales. On the basis of recent history, the estimated relationship between inventories and sales (in millions of dollars) is as follows:

Inventories = $11 + 0.08(Sales)

Given the estimated sales forecast and the estimated relationship between inventories and sales, what is your forecast of the company's year-end inventory level? Round your answer to two decimal places. Do not round intermediate calculations.

Reference no: EM131918916

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