CelebNav, Inc. had sales last year of $740,000, and the analysts are predicting

Question

CelebNav, Inc. had sales last year of $740,000, and the analysts are predicting a good year for the start-up, with sales growing 21 percent a year for the next three years. After that, the sales should grow 12 percent per year for two years, at which time the owners are planning to sell the company. What are the projected sales for the last year before the sale? (Round intermediate calculations to 6 decimal places, in all cases round your final answer to the nearest penny.) Projected sales in year5

Explanation / Answer

Dear student, only one question is allowed at a time. I am answering the first question

1)

Expected sales

= Sales of last year x (1 + Growth 1) ^ 3 x (1 + Growth 2) ^ 2

= $740,000 x (1 + 0.21) ^ 3 x (1 + 0.12) ^ 2

= $740,000 x 1.771561 x 1.254400

= $1,644,462.1

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