Question

Requirements: Develop a ten-year sales projection assuming the growth as below:

a. 1% for 2nd year
b. 3% for 3rd to 5th year
c. 8% for 6th to 10th year

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Number of units
Unit dollar
Sales

Answer 1

Ten Year Sales Projection

Year - Unit Dollar - Sales

Year 1 - 10,000 - $4 - $40,000

Year 2 - 10,100 - $4 - $40,400

Year 3 - 10,403 - $4 - $41,612

Year 4 - 10,715 - $4 - $42,860

Year 5 - 11,037 - $4 - $44,148

Year 6 - 11,920 - $4 - $47,680

Year 7 - 12,873 - $4 - $51,492

Year 8 - 13,903 - $4 - $55,612

Year 9 - 15,015 - $4 - $60,060

Year 10 - 16,216 - $4 - $64,864

Step-by-step explanation:

Assumptions:

Selling Price Per unit (unit dollar) = $4

Selling Price remains constant from Year 1 to 10

Year 1 Volume (number of units) = 10,000

Year 1 Sales ($) = $40,000

Volume Year 1 to 10 =

Yr 1 - 10,000, Yr 2 - (10,000 + (1% x 10,000)) = 10,100, Yr 3 - (10,100 + (3% x 10,100)) = 10,403, Yr 4 - (10,403 + (3% x 10,403)) = 10,715, Yr 5 - (10,715 + (3% x 10,715)) = 11,037, Yr 6 - (11,037 + (8% x 11,037)) = 11,920, Yr 7 - (11,920 + (8% x 11,920)) = 12,873, Yr 8 - (12,873 + (8% x 12,873)) = 13,903, Yr 9 - (13,903 + (8% x 13,903)) = 15,015, Yr 10 - (15,015 + (8% x 15,015)) = 16,216.

Unit Sales Year 1 to 10 = $4

Sales Year 1 to 10 =

Yr 1 - $40,000. Yr 2 - $40,400. Yr 3 - $41,612. Yr 4 - $42,860. Yr 5 - $44,148. Yr 6 - $47,680. Yr 7 - $51,492. Yr 8 - $55,612. Yr 9 - $60,060. Yr 10 - $64,864