|
|
|
 Topic: how to solve like this problem ( Topic Closed)
|
 
|
| Author |
|
syousuf
Regular
Joined: 18 Apr 2008
Location: Saudi Arabia
Online Status: Offline
Posts: 169
|
| Posted: 06 Mar 2012 at 23:59 | IP Logged
|
|
|
We anticipate that the expected inflation rate for next year will be 1 %. Sales this year totaled
$100,000,000. Based on forecasts from the marketing department, we are anticipating nominal sales
growth of 10% next year. However, since that is nominal sales growth, the 10% figure includes the effect
of inflation. The production department needs to know what that means in actual quantity of increased
sales, so they can prepare for it. What do we forecast that real sales will be next year?
|
| Back to Top |
|
| |
Shahean
Newbie
Joined: 21 Mar 2012
Online Status: Offline
Posts: 2
|
| Posted: 21 Mar 2012 at 16:58 | IP Logged
|
|
|
Nominal Rate = (1+Real Rate)*(1+Inflation Rate)-1
0.10 = (1+R)*(1+0.01)-1
1.10 = (1+R)*(1.01)
(1.10/1.01) = 1+R
1.08911 = 1+R
R= 1.08911-1= 0.08911 = 8.911%
Prior Period Sales 100,000,000
Inflation Effect 1% (100,000,000 * 0.01) 1,000,000
Nominal Sales 101,000,000
Growth Rate Effect (8.911% * 101,000,000) 9,000,111
Total Predicted sales 110,000,111
|
| Back to Top |
|
| |
|
|
Sorry, you can NOT post a reply.
This topic is closed.
|
|
You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot delete your posts in this forum
You cannot edit your posts in this forum
You cannot create polls in this forum
You cannot vote in polls in this forum
|
 Copyright ©2001-2010 Web Wiz Guide
This page was generated in 0.0938 seconds.
|
Active Topics 
Memberlist 
Search 
Help
Register 
Login
