PLEASE GIVE ANSWER IN MS EXCEL.

Finley Heaters Inc. is a mid$-$sized manufacturer of residential water heaters. Sales have

grown during the last several years, and the company's production capacity needs to be

increased. The company's management wonders if national housing starts might be a good

indicator of the company's sales:

$(CLO3$: $10$ Marks$)$

a$.$ Develop a simple linear regression analysis between Finley Heaters' sales and national

housing starts. Forecast Finley Heaters' sales for the next two years. The National Home

Builders Association estimates that national housing starts will be $7\mathrm{.}1$ million and $8\mathrm{.}0$ million

for the next two years.

$(5$ Marks$)$

b$.$ What percentage of variation in Finley Heaters' sales is explained by national housing

starts?

$(2$ marks$)$

c$.$ Would you recommend that Finley Heaters management use the forecast from Part a

to plan facility expansion? Why or why not? What could be done to improve the

forecast?