Purchase Solution

# Calculating Annual Growth Rate

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The following table shows annual sales data for Landrover, Inc., over the ten-year 1998-2008 period:

Year Sales
(\$ Millions)
1998 \$4.0
1999 4.8
2000 5.6
2001 6.4
2002 7.0
2003 7.6
2004 8.4
2005 9.2
2006 10.2
2007 11.2
2008 12.4

A.Calculate the 1998-2008 growth rate in sales using the constant rate of change model with annual compounding.
B.Calculate 5-year and 10-year sales forecasts.

##### Solution Summary

The solution describes the steps to calculate growth rate for the given data. It also gives 5-year and 10-year forecasts based upon calculated growth rate.

##### Solution Preview

A. Calculate the 1998-2008 growth rate in sales using the constant rate of change model with annual compounding.

Initial sales in 1998=So=\$4.0 million
Sales in 2008=S=\$12.4 million
Number of periods=n=10 years (1998 to 2008)
Constant growth ...

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###### Education
• BEng (Hons) , Birla Institute of Technology and Science, India
• MSc (Hons) , Birla Institute of Technology and Science, India
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