In order to be competitive in local markets, the firm is considering setting up operations in China. One of factors that will impact the decision-making is the predicted sales volume in China in 2020. It is assumed that the growth in sales volume is 100% correlated with the GDP growth in China.

For Problem 2, predict the annual sales in China in 2020. Carefully read the grading criteria on the LP5.2/Problem 2 Assignment Rubric to ensure you understand how this problem will be graded.

Table 2: Estimated Sales in China in 2017

Market Annual Sales in 2017

China $7,920,000

Table 3: GDP Growth Rate Per Market (in percent)

Year China EU

2005 11.4 1.9

2006 12.7 2.2

2007 14.2 1.6

2008 9.7 0.2

2009 9.4 -0.5

2010 10.6 1.7

2011 9.5 2.1

2012 7.9 -4.4

2013 7.8 0.4

2014 7.3 3.1

2015 6.9 3.3

2016 6.1 2.1