Blossom Sales Company has sales of $1,000,000. If the company’s management expects sales to grow 4.00...

Blossom Sales Company has sales of $1,000,000. If the company’s management expects sales to grow 4.00 percent annually, how long will it be before sales double? Use financial calculator to solve this problem. (Round answer to 0 decimal places, e.g. 20.)

Time needed to double its sales=

Solutions

Expert Solution

Present value (PV) = 1000000

Future value (FV) = 2000000

Rate of interest (R) = 4%

FV = PV*(1+R)^N

2000000 = 1000000 * (1+4%)^N

(1+4%)^N = 2000000/1000000

1.04^N = 2

Taking log on both sides we have:

N * LN(1.04) = LN(2)

N * 0.039221 = 0.693147

N = 17.67 years

jeff jeffy answered 2 years ago

Next > < Previous

Related Solutions

Blossom Corp. is a fast-growing company whose management expects it to grow at a rate of...

Blossom Corp. is a fast-growing company whose management expects it to grow at a rate of 22 percent over the next two years and then to slow to a growth rate of 16 percent for the following three years. If the last dividend paid by the company was $2.15. What is the dividend for the 1st year? (Round answer to 3 decimal places, e.g. 15.250.) D1 $enter a dollar amount of the dividend for the first year rounded to 3...

Blossom Corp had sales of $350,000 in 2017. If management expects its sales to be $476,450...

Blossom Corp had sales of $350,000 in 2017. If management expects its sales to be $476,450 in 6 years, what is the rate at which the company’s sales are expected to grow? (If you solve this problem with algebra round intermediate calculations to 4 decimal places, in all cases round your final answer to 2 decimal places, e.g. 8.72%.) Growth rate

The Blossom City Ice Cream Company management has just completed an assessment of the company’s assets...

The Blossom City Ice Cream Company management has just completed an assessment of the company’s assets and liabilities and has obtained the following information. The firm has total current assets worth $620,000 at book value and $500,000 at market value. In addition, its long-term assets include plant and equipment valued at market for $690,000, while their book value is $900,000. The company’s total current liabilities are valued at market for $540,000, while their book value is $490,000. Both the book...

Fresno Corp. is a fast-growing company whose management that expects to grow at a rate of...

Fresno Corp. is a fast-growing company whose management that expects to grow at a rate of 26 percent over the next two years and then to slow to a growth rate of 20 percent for the following three years. The required rate of return is 14 percent. If the last dividend paid by the company was $2.15. What is the dividend for 1st year? (Round answer to 3 decimal places, e.g. 15.250.) D1 $ LINK TO TEXT What is the...

Sandhill Corp. is a fast-growing company whose management expects it to grow at a rate of...

Sandhill Corp. is a fast-growing company whose management expects it to grow at a rate of 29 percent over the next two years and then to slow to a growth rate of 12 percent for the following three years. If the last dividend paid by the company was $2.15. What is the dividend for the 1st year? (Round answer to 3 decimal places, e.g. 15.250.) What is the dividend for the 2nd year? (Round answer to 3 decimal places, e.g....

Ivanhoe Corp. is a fast-growing company whose management expects it to grow at a rate of...

Ivanhoe Corp. is a fast-growing company whose management expects it to grow at a rate of 23 percent over the next two years and then to slow to a growth rate of 17 percent for the following three years. If the last dividend paid by the company was $2.15. What is the dividend for the 1st year? (Round answer to 3 decimal places, e.g. 15.250.) D1: $______ What is the dividend for the 2nd year? (Round answer to 3 decimal...

Blossom, Inc., management expects the company to earn cash flowsof $12,800, $15,600, $18,600, and $19,400...

Blossom, Inc., management expects the company to earn cash flows of $12,800, $15,600, $18,600, and $19,400 over the next four years. If the company uses an 6 percent discount rate, what is the future value of these cash flows at the end of year 4? (Round answer to 2 decimal places, e.g. 15.25. Do not round factor values.)Future value

Global Corp. expects sales to grow by 7 % next year. Using the percent of sales...

Global Corp. expects sales to grow by 7 % next year. Using the percent of sales method and the data provided in the given tables, forecast: a. Costs except depreciation b. Depreciation c. Net income d. Cash e. Accounts receivable f. Inventory g. Property, plant, and equipment h. Accounts payable (Note: Interest expense will not change with a change in sales. Tax rate is 26%.) Income Statement ($ million) Balance Sheet ($ million) Net Sales 185.4185.4 Assets Costs Except Depreciation...

ABC Company has projected Sales of $13181 in January. The sales are expected to grow by...

ABC Company has projected Sales of $13181 in January. The sales are expected to grow by 9% each month. ABC's collection schedule is as follows: ABC collects 55 percent of its sales in the month of sale and the remainder is collected in the following month. What is the amount of the March cash collections?

A company expects to make a payment of €1,000,000 to their vendor in Germany in six...

A company expects to make a payment of €1,000,000 to their vendor in Germany in six months. The following information is available: Spot rate today = $1.1800 $/€ Six-month Forward Rate = $1.22 $/€ Six-month Call Option premium, E=$1.18 $0.04 Six month Put option premium, E=$1.18 $0.03 Six-month Interest rate in U.S. 4% per annum Amount € 1,000,000.00 a) Should the company be worried about the dollar depreciation or appreciating? b) How should the company hedge the payment using options?...

Subjects