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Growth Rates

Sales for Hanebury Corporation’s just-ended year were $12 million. Sales were $6 million 5 years earlier.

At what rate dis sales grow?

Suppose someone calculate the sales growth for Honebury in part as follow. 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: EM13783225

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