15. Charlie's Cycles Inc. has $110 million in sales. The company expects that its sales will increase 10% this year. Charlie's CFO uses a simple linear regression to forecast the company's inventory level for a given level of projected sales. On the basis of recent history, the estimated relationship between inventories and sales (in millions of dollars) is as follows: Inventories = $9 + .09(Sales) Given the estimated sales forecast and the estimated relationship between inventories and sales, what are your forecasts of the company's year-end inventory level and its inventory turnover ratio?
15. Charlie's Cycles Inc. has $110 million in sales. The company expects that its sales will increase 10% this year. Charlie's CFO uses a simple linear regression to forecast the company's inventory level for a given level of projected sales. On the basis of recent history, the estimated relationship between inventories and sales (in millions of dollars) is as follows: Inventories = $9 + .09(Sales) Given the estimated sales forecast and the estimated relationship between inventories and sales, what are your forecasts of the company's year-end inventory level and its inventory turnover ratio?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Transcribed Image Text:15. Charlie's Cycles Inc. has $110 million in sales. The company expects that its sales will
increase 10% this year. Charlie's CFO uses a simple linear regression to forecast the
company's inventory level for a given level of projected sales. On the basis of recent
history, the estimated relationship between inventories and sales (in millions of dollars) is
as follows:
Inventories = $9 + .09(Sales)
%3D
Given the estimated sales forecast and the estimated relationship between inventories and sales,
what are your forecasts of the company's year-end inventory level and its inventory turnover
ratio?
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