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    Forecasting sales

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    Suppose sales were $28,873, $35,626, and $47,689 for the years 2000, 2001, and 2002, respectively. Compute the annual growth rate in sales for 2001 and 2002.
    Compute the arithmetic average growth rate based on the annual growth rate calculations. Using the arithmetic average growth rate, compute the forecast for sales for 2003.

    Please work problems; formula and showing how to solve problem is most important (so I can see how to solve similar problems). Thanks

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    Solution Preview

    Year Sales % increase
    2001 $28,873
    2002 $35,626 ...

    Solution Summary

    The solution calculates annual growth rate in sales and arithmetic average growth rate and using the arithmetic average growth rate computes the forecast for sales.