Explain what is wrong with the calculation

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Reference no: EM133615983

Problem: Stetson Inc.'s sales for 2021 were $16 million. Sales were $8 million 5 years earlier. At what rate did sales grow? Suppose someone calculated the sales growth for Stetson as follows: "Sales doubled in 5 years. This represents a growth of 100% in 5 years; dividing 100% by 5 results in an estimated growth rate of 20% per year." Explain what is wrong with this calculation.

Reference no: EM133615983

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