Reference no: EM132617621
Fred's Hardware and Hobby House expects its sales to increase at a constant rate of 6 percent$500,000. Per year over the next three years. Current sales are
Complete the following table by forecasting sales for each of the next three years.
Year 1 Forecasted Sales (Dollars) ____________ ($583,333 or $530,000 or $470,000)
Year 2 Forecasted Sales (Dollars) ____________ ($680,556 or $561,800 or $441,800)
Year 3 Forecasted Sales (Dollars) ____________ ($415,292 or $595,508 or $793,981)
If sales in 2003 were $300,000 and they grew to $500,000 by 2007 (a four-year period), the actual annual compound growth rate was:
A. 10.76%
B. 18.56%
C. 13.62%
Which of the following are some of the hazards of employing a constant rate of growth forecasting model? Check all that apply.
A. It assumes that there are no cyclical variations.
B. It is ill-suited to estimate secular trends.
C. It ignores seasonal trends.