2. Suppose historically we have (in units of $10 million)

Year Cost (Y) Sales (X)

2015 2.3 12

2016 3.2 23

2017 2.5 13

2018 9.8 62

2019 5.9 51

2020 ? 25

(a) Using regression to estimate the model Cost = a0 +a1Sales, if sales are projected to be $250 million (as indicated in the table), what is the anticipated cost?

b) Based on the model (using 2015 to 2019 data), how much do sales need to be to break even?