Question

In its 2017 annual report, Liberty Company reported sales of $1,200 million. If you anticipate that sales will grow by 4% each year for the foreseeable future, what will 2021forecasted sales be?

A.$1,403.8 million
B.$1,248.0 million
C.$1,349.8 million
D.$1,179.7 million
E.None of the above

Answer 1

B.$1,248.0 million

Step-by-step explanation:

$12,480,000

Answer 2

A.$1,403.8 million

Step-by-step explanation:

The computation of the 2021 forecasts sales would be

Sales for 2017 = $1,200 million

Sales for 2018 would be

= $1,200 + $1,200 × 4%

= $1,200 + 48

= $1,248 million

Sales for 2019 would be

= $1,248 + $1,248 × 4%

= $1,248 + 49.92

= 1,297.92 million

Sales for 2020 would be

= $1,297.92 + $1,297.92 × 4%

= $1,297.92 + $51.9168

= $1,349.8368 million

Sales for 2021 would be

= $1,349.8368 + $1,349.8368 × 4%

= $1,349.8368 + 53.99344

= 1,403.83 million