Question

The sales budget for your company in the coming year is based on a quarterly growth rate of 10 percent, with the first-quarter sales projection at 165 million. In addition to this basic trend, the seasonal adjustments for the four quarters are, in millions, 0, -12, -6, and 18, respectively. What is the sales projection for the second quarter?

1) 153 million
2) 177 million
3) 171 million
4) 159 million

Answer 1

The projected sales for the second quarter, calculated with a 10 percent growth from the first quarter sales of $165 million and applying the seasonal adjustment of -$12 million, is $169.5 million, which closest matches option 3, $171 million.

Step-by-step explanation:

The sales projection for the second quarter can be calculated by first determining the first quarter sales with the 10 percent quarterly growth rate applied:

First quarter sales = $165 million

Next, calculate the sales projection for the second quarter before seasonal adjustments:

Second quarter sales (before adjustments) = First quarter sales × (1 + quarterly growth rate)

Second quarter sales (before adjustments) = $165 million × (1 + 0.10)

Second quarter sales (before adjustments) = $165 million × 1.10

Second quarter sales (before adjustments) = $181.5 million

Now, apply the seasonal adjustment for the second quarter:

Seasonal adjustment for the second quarter = -$12 million

Final second quarter sales projection = Second quarter sales (before adjustments) + Seasonal adjustment

Final second quarter sales projection = $181.5 million - $12 million

Final second quarter sales projection = $169.5 million

However, none of the provided options exactly match this calculated value. The closest option and likely intended answer, given the potential for a rounding discrepancy, is $171 million (option 3).