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Sam has been running his swimming pool cleaning business now for five years. He is considering enlarging his service area to a 100 mile radius, which would require two new offices in different parts of town. He would like to take out a business loan to cover the cost of expansion. The profits for Sam's business over the last 5 years are outlined in the table below. According to this information, what would be the best estimate for Sam to quote as expected profits in the next year in his new business plan? Business Year Net Profit 1 $43,502. 25 2 $47,417. 45 3 $51,685. 02 4 $56,336. 68 5 $61,406. 98 a. $66,477. 28 b. $66,933. 60 c. $72,003. 91 d. $72,957. 63.

Respuesta :

Thus, the best estimate for Sam to quote as expected profits in the next year in his new business plan is $66,933.60.

What is net profit?

Net profit is the amount of a business earn after deducting all the expenditure over it.

Sam has been running his swimming pool cleaning business now for five years. He is considering enlarging his service area to a 100 mile radius, which would require two new offices in different parts of town.

He would like to take out a business loan to cover the cost of expansion. The profits for Sam's business over the last 5 years are outlined in the table below.

  • Business Year      Net Profit
  • 1                          $43,502.25
  • 2                         $47,417.45
  • 3                         $51,685.02
  • 4                         $56,336.68
  • 5                         $61,406.98

Using the regression graph, the quadratic equation we get for this data as,

[tex]y=192.4493x^2+3318.1733x+39998.214[/tex]

For the 6 year value,

[tex]y=192.4493(6)^2+3318.1733(6)+39998.214\\y\approx 66835.43[/tex]

This value is much near to the option b which is $66,933.60.

Thus, the best estimate for Sam to quote as expected profits in the next year in his new business plan is $66,933.60.

Learn more about the Net profit here;

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