Problem 2

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