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Kamath-Meier Corporation's CFO uses this equation, which was developed by regressing inventories on sales over the past five years, to forecast inventory requirements: Inventories - $22.0 + 0.125(Sales). The company expects sales of $400 million during the current year, and it expects sales to grow by 30 percent next year. What is the inventory forecast for next year? All dollars are in millions. ANSWER Current year's sales Growth rate Projected sales Required inventories = $22.0 + 0.125 times Projected Sales = $22.0 + 0.125 times $520.0 = $87.0 Spreadsheet solution: Current Year's sales Growth rate Projected sales Intercept Slope Projected sales $0 Required inventories $0