4. Finley Heaters Inc. is a midsized manufacturer of residential water heaters. Sales have grown during the last several years, and the company's production capacity needs to be increased. The company's management wonders if national housing starts might be a good indicator of the company's sales: National Finley Heaters' Housing Starts Annual Sales Year (millions) (millions of dollars) I 2 3 4 5 0 6 7.4 7 7.0 86 a. Develop a simple linear regression analysis between Finley Heaters' sales and national housing starts. Forecast Finley Heaters' sales for the next two years. The National Home Builders Association estimates that national housing starts will be 7.1 million and 8.0 million for the next two years. b. What ercenta e of variation in Finle Heaters' sales is ex lained b national housin starts? P g Y P 3' g c. Would you recommend that Finley Heaters management use the forecast from Part a to plan facility expansion? Why or why not? What could be done to improve the forecast? 5. The number of Texas tax auditors needed by the Internal Revenue Service varies from quarter to quarter. The past 12 quarters of data are shown below: Year Quarter Auditors 1 132 139 136 140 134 142 140 139 135 137 139 141 LMMHLWMHLWMH a. Use moving averages to forecast the number of auditors needed next quarter if AP = 2, AP = 4, marl A 'D E