Question

In: Finance

(Future value ) Sales of a new finance book were 12,000 copies this year and were...

(Future value ) Sales of a new finance book were 12,000 copies this year and were expected to increase by 21 percent per year. What are expected sales during each of the next 3 years?

a. If the 12,000 copies of book sales this year were expected to increase by 21 percent per year, what are the expected sales of the new finance book next year?

Answer: ______copies. (Round to the nearest unit.)

b. If the 12,000 copies of book sales this year were expected to increase by 21 percent per year, what are the expected sales of the new finance book in two years?

Answer: ____copies. (Round to the nearest unit.)

c. If the 12,000 copies of book sales this year were expected to increase by 21 percent per year, what are the expected sales of the new finance book in three years?

Answer: _____copies. (Round to the nearest unit.)

Solutions

Expert Solution

Current sales = 12,000 copies

Rate of increase = 21%

a. The expected sales of the new finance book next year = Current sales * (1 + Rate of increase)^1

The expected sales of the new finance book next year = 12,000 * (1 + 0.21)^1

The expected sales of the new finance book next year = 12,000 * 1.21

The expected sales of the new finance book next year = 14,520 copies

b. The expected sales of the new finance book two years = Current sales * (1 + Rate of increase)^2

The expected sales of the new finance book two years= 12,000 * (1 + 0.21)^2

The expected sales of the new finance book two years = 12,000 * 1.4641

The expected sales of the new finance book two years = 17,569.2

The expected sales of the new finance book two years = 17,569 copies

c. The expected sales of the new finance book three years = Current sales * (1 + Rate of increase)^3

The expected sales of the new finance book three years= 12,000 * (1 + 0.21)^3

The expected sales of the new finance book three years = 12,000 * 1.771561

The expected sales of the new finance book three years = 21,258.732

The expected sales of the new finance book three years = 21,259 copies


Related Solutions

Your finance textbook sold 48,000 copies in its first year. The publishing company expects the sales...
Your finance textbook sold 48,000 copies in its first year. The publishing company expects the sales to grow at a rate of 23 percent each year for the next three years and by 10 percent in the fourth year. Calculate the total number of copies that the publisher expects to sell in years 3 and 4.
If $12,000 is invested at 2.5% for 20 years, find the future value if the interest...
If $12,000 is invested at 2.5% for 20 years, find the future value if the interest is compounded the following ways. (Round your answers to the nearest cent.) (a) annually $   (b) semiannually $   (c) quarterly $   (d) monthly $   (e) daily (N = 360) $   (f) every minute (N = 525,600) $   (g) continuously $   (h) simple (not compounded) $
Prompt: Present value and Future value – In finance we often calculate present and future values....
Prompt: Present value and Future value – In finance we often calculate present and future values. Discuss their uses and the relationship between present and future value. Requirements: 250 words
Future Value Compute the future value in year 9 of a $440 deposit in year 4...
Future Value Compute the future value in year 9 of a $440 deposit in year 4 and another $240 deposit at the end of year 5 using a 9% interest rate. Multiple Choice $1,015.77 $1,476.89 $964.40 $1,144.40
Based on the following cash flows, find the future value in year 9. Assume deposits were...
Based on the following cash flows, find the future value in year 9. Assume deposits were made at the end of the year and the rate of return is 15%. Year 1 4 9 Cash Flows 9,000 4,000 1,000
Hi I am doing an intro to finance the the present value and future values are...
Hi I am doing an intro to finance the the present value and future values are a little bit confusing so my question is: How is the difference between an ordinary annuity and an annuity due affect the Present Value and Future Value of two otherwise identical annuities?
Future Value: Ordinary Annuity versus Annuity Due What is the future value of a 3%, 5-year...
Future Value: Ordinary Annuity versus Annuity Due What is the future value of a 3%, 5-year ordinary annuity that pays $800 each year? Round your answer to the nearest cent. $ If this were an annuity due, what would its future value be? Round your answer to the nearest cent. $
Future Value Computation Kate Company deposited $12,000 in the bank today, earning eight percent interest. Kate...
Future Value Computation Kate Company deposited $12,000 in the bank today, earning eight percent interest. Kate plans to withdraw the money in five years. How much money will be available to withdraw assuming that interest is compounded (a) annually, (b) semiannually, and (c) quarterly? Use Excel or a financial calculator for computation. Round answers to the nearest dollar. (a) Annually...... Answer 0 (b) Semiannually....... Answer 0 (c) Quarterly....... Answer 0
In finance, we study the future value of money to determine how much cash flows will...
In finance, we study the future value of money to determine how much cash flows will grow over a given period. If you invest $400 at the end of the next seven (7) years, (a) and your opportunity cost is 6 percent compounded annually, what will your investment be worth after you make the last $400 payment? (b) If the payments are made at the beginning of each year what will be the ending amount?
Book value and taxes on sale of assets  Troy Industries purchased a new machine 3 ​year(s)...
Book value and taxes on sale of assets  Troy Industries purchased a new machine 3 ​year(s) ago for $82,000. It is being depreciated under MACRS with a​ 5-year recovery period using the schedule based on table below. Assume 40% ordinary and capital gains tax rates. a. What is the book value of the​ machine? b. Calculate the​ firm's tax liability if it sold the machine for each of the following​ amounts: $98,400​; $57,400​; $23,780​; and $16,600. Rounded Depreciation Percentages by...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT