Assume that you are working on the Sales Forecast for the upcoming year for your company. After collecting data and doing a trend analysis, you have estimated that the growth rate in Sales will be 5.45%. This years Sales figure was $504,504.50. Your boss thinks that Operating Income is strongly dependent on the Sales figure, therefore she wants you to come up with an estimate for the next years Operating Income as well. Based on your analysis of the past years data, the relation between Sales and Operating Income is best described with a regression equation as given below:

( Operating Income ) = -$35,500 + 0.435 x ( Sales ) Using the equation above, what is your Operating Income estimate for the next year?

Group of answer choices

$183,960

$195,920

$338,750

$410,200

$532,000

The following two projects are mutually exclusive and repeatable. Your company wants you to use Replacement Chain Technique to evaluate projects with unequal lives. Suppose that the cost to repeat Project 2 changes in Year 3. Calculate the cost to repeat Project 2 that will make you indifferent between the two projects. Your companys cost of capital is 8%.

Year	0	1	2	3	4	5	6
Project1	$100	$40	$40	$40	$40	$40	$40
Project2	$200	$90	$90	$90

Group of answer choices

$130.25

$165.20

$200.00

$248.95

$305.00