Question

Holiday Greeting Cards is a local company organized late in July of 2010. The company’s net income for each of its first six calendar quarters of operations is summarized below. (Amounts are stated in thousands of dollars.)


Glen Wallace reports the business and economic news for a local radio station. On the day that
Holiday Greeting Cards released the above financial information, you heard Wallace make the following statement during his broadcast: “Holiday Greeting Cards enjoyed a 350 percent increase in its profits for the fourth quarter, and profits for the entire year were up by over 100 percent.”
Instructions
a. Show the computations that Wallace probably made in arriving at his statistics.
b. Do you believe that Wallace’s percentage changes present a realistic impression of Holiday Greeting Cards’s rate of growth in 2011? Explain.
c. What figure would you use to express the percentage change in Holiday’s fourth-quarter profits in 2011? Explain why you would compute the change in thismanner.


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  • CreatedApril 17, 2014
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