Capital Cables Ltd manufactures digital fibre optic cables designed for telecommunications use. The company markets this product to commercial contractors engaged in government projects. Capital Cables Ltd has been successful in its bids for two existing projects. The first one requires supplying the cabling required for a new school being constructed in the local area. The second project requires Capital Cables Ltd to supply the product to replace the cable in a local hospital. For new cabling situations Capital Cables Ltd requires 1 metre of cable per square metre, while for replacement situations Capital Cables Ltd requires 1.5 metres of cable per square metre.

The company sells the cable in two types of casing — polymer and polyethylene — depending on the environmental conditions that the cable will be placed in. For new constructions the contractors will use the polymer in internal applications (30%) and polyethylene in exterior environments (70%). When an existing premises requires replacement cable, they will use polymer in 25% of the area and polyethylene in the remainder.

The other information available is as follows.

Required Prepare a sales forecast for Capital Cables Ltd .

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School square metre Hospital square metre Selling price per metre-polymer Selling price per metre-polyethylene Area 2050 10 568 $155 $190