1. Formulate demand forecasting equation using High-low demand foresting method by considering the following observations from 10 years data.

	Average House hold Income(X)	Demand(Y)
Highest observation	24	180
Lowest observation	16	120

2. A company has an investment costing $500 with the following expected net cash flows after tax and before depreciation.

Year	1	2	3	4	5
Net Cash Flows	12	13	15	16	18

Required: Using 8% cost of capital determine the following and decide whether the project is accept or not.

A. Payback period (PBP), B). Net Present value(NPV) C). Profitability Index