Which Sales Forecast Is Correct Based on the Regression Model

question 36

Multiple Choice

Which sales forecast is correct based on the regression model described below if the company decides to spend $10,000 on advertising:
Y = 70.5 + 3.0x
Where: y = unit sales in thousands
X = dollars spent on advertising on thousands
Where are forecasted unit sales?

• A)100.5 units.
• B)30,070.5 units.
• C)73.5 units.
• D)30.503 units.
• E)1,000.5 units.

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Definitions:

Control Finances

Managing and regulating one's financial activities or the financial activities of an organization to ensure stability and growth.

NFIB Survey

A research tool used by the National Federation of Independent Business to collect data on small business trends and sentiments.

Poor Earnings

A term used to describe a lower than expected profit or loss reported by a company, indicating underperformance.

Herzberg

Refers to Frederick Herzberg, and emphasizes his work in motivational theory, specifically the differentiation between factors that increase job satisfaction and those that reduce dissatisfaction.