Explanation:

A seasonal index of 1.8 means that Quarter 1 sales are 80% above the average quarterly sales (since an index of 1.0 represents the average).

Step 1: Calculate average quarterly sales

• Quarter 1 sales = $180 million
• Seasonal index = 1.8
• Average quarterly sales = Quarter 1 sales ÷ Seasonal index = $180 million ÷ 1.8 = $100 million

Step 2: Calculate annual sales estimate

• Annual sales = Average quarterly sales × 4 quarters = $100 million × 4 = $400 million

Therefore, the correct answer is $400 million.

The provided explanation in the text confirms this calculation: "An index of 1.8 means that quarter 1 sales are 80% above the norm (average). Thus, each quarter has average sales worth $180,000,000 / 1.8 = $100,000,000. Therefore, the annual estimate = 4 * Quarter average = 4 * $100,000,000 = $400,000,000."