You are making growth projections for a firm. You have estimated that its revenue will reach...
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You are making growth projections for a firm. You have estimated that its revenue will reach $100 million in 10 years. If the projected annual growth in revenue is 3 percent, what is the current level of revenue? (Hint: You need to use a simple future value of a lump sum formula to answer this question FV=PV*(1+r)^n. FV is future value, PV is present value, n is number of years and r is discount rate - which in this setting is growth rate. You are solving for PV.) You are making growth projections for a firm. You have estimated that its revenue will reach $100 million in 10 years. If the projected annual growth in revenue is 3 percent, what is the current level of revenue? (Hint: You need to use a simple future value of a lump sum formula to answer this question FV=PV*(1+r)^n. FV is future value, PV is present value, n is number of years and r is discount rate - which in this setting is growth rate. You are solving for PV.)
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Related Book For
Financial Reporting Financial Statement Analysis and Valuation
ISBN: 978-0324302950
6th edition
Authors: Clyde P. Stickney
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