Question
ACME Company has $450 million in sales. The company expects that its sales will increase 10% this year. ACME uses a simple linear regression to
ACME Company has $450 million in sales. The company expects that its sales will increase 10% this year. ACME uses a simple linear regression to forecast the companys receivables level for a given level of projected sales. On the basis of recent history, the estimated relationship between receivables and sales (in millions of dollars) is as follows:
Receivables = $7.25 + .10*Sales.
Given the estimated sales forecast and the estimated relationship between receivables and sales, what are your forecasts of the companys year-end balance sheet for receivables? (in millions)
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