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Mr. Ahmad who has been recently appointed as Beroga Marketing Director, is dissatisfied with the regression results. He believes that some account of personal income

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Mr. Ahmad who has been recently appointed as Beroga Marketing Director, is dissatisfied with the regression results. He believes that some account of personal income variations by region should be included. He is also dubious about the significance of the retail outlets variable (X1). The income data is shown in Table Q3. Table Q3: Regional income data Region Income (RM Mil) Johor 48.6 Melaka 16.3 Negeri Sembilan 17.3 Selangor 46.4 Perak 32.6 Kedah 32.1 Perlis 9.3 Kelantan 29.2 Terengganu 32.6 Pahang 30.5 Sabah 41.0 Sarawak 35.1(a) Assume that Mr. Ahmad's analysis is accepted, and a new demand equation is used for prediction. The equation is as follows: Y Sales = 4.25 + 5.46 X2 registered cars + 0.94 X3 Income Predict the annual sales for a new region, Federal Territory which has total personal income of RM 39.2 mil, 145 retail outlets and 3.1 mil cars. (b) The number of registered cars is expected to fall by 3% in Federal Territory over the next 3 years, despite income growth of about 5% over the same period. By then, tighter vehicle testing standards are expected to create a one-off increase in demand for Beroga's products of 4% in all regions. Compute the combined effect of these changes in the Federal Territory by predicting the sales of Federal Territory for the next 3 years

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