Regression analysis is a statistical technique that fits a line to observed data points so that the resulting equation can be used to forecast other data points. It is useful in excess capacity and econamies of scale situations. Economles of scale occur when the ratio of asset to sales will change as the size of the firm increases. Regression analysis can lead to improved financial forecasts and better information which can be used to improve management's actions: Quantitative Problem: Josper Jewelry has $140 millon in sales. The company expects that its sales will increase 5% this year. Jasper's CFO uses a simpie linear regression to forecast the company's inventory level for a given level of projected sales, On the basis of recent history, the entimated relationship between invertories and sales (in miltions of doliars) is as foliows: inventories=19+0.09(5aies) Given the estimated sales forecast and the estimated relationship between inventories and sales, whot is your forecast of the company's year-end Inventary level? Enter your answer in malioris, For example, an answer of 510,550,000 should be entered as 10.55 . Do not round intermediate calculations. Round your answer to two decimal places. 5 million