Question

If changing market conditions cause a company earning $12,000,000 in 2015 to project a loss of 1% of its profit in each of the next 5 years, what profit does it project in 2020

Answer 1

the profit expected in the year 2020 is $115,27,152.12

Step-by-step explanation:

The computation of the profit in the project for the year 2020 is shown below:

Given that

Earnings = $12,000,000

Loss percentage = 1%

Time period = 5 years

Based on the above information

= $12,000,000 × (1 - 0.01)^ 5 - 1

= $12,000,000 × 0.99^4

= $115,27,152.12

Hence, the profit expected in the year 2020 is $115,27,152.12

The same is to be considered