A manufacturing company has observed a steady decline in their carbon dioxide emission due to the green initiatives that are aimed at achieving a net-zero target by the year 2050. Of interest is the fact that the reported profits have also shown signs of marginal growth and the CEO is interested to know if there is any connection between its carbon footprint (CO2 emission-X) and the financial performance (in millions ksh-Y). He has approached you as a financial modelling expert to help him understand the implication of the data below from the company’s records:
Year
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
CO2 Emission (X)
88
74
75
69
66
54
58
51
47
44
ƩXY
178,909
ƩY
2,947
ƩX2
40,988
Required:
Using OLS method forecast the profit that would be made in the year 2025 when the company anticipates that it would emit only 35 metric tons of CO2.
Question 10Answer
a.
Ksh 388 millions
b.
Ksh 374 millions
c.
Ksh 380 millions
d.
Ksh 392 millions
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