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

Solutions

Expert Solution

Given,

Present value = $350000

Future value = $476450

Number of years (n) = 6 years

Solution :-

Growth rate = (future value/present value)^1/n - 1

= ($476450/$350000)^1/6 - 1

= (1.3613)^1/6 - 1

= 1.0528 - 1 = 0.0528 or 5.28%

jeff jeffy answered 2 years ago

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