Sales data for the fiscal years 2017, 2018, and 2019 for Advanced Micro Devices (AMD) follows (dollars
Question:
Sales data for the fiscal years 2017, 2018, and 2019 for Advanced Micro Devices (AMD) follows (dollars in billions):
According to the financial statements, sales increased by 26 percent from 2017 to 2019. Assume that the general rate of inflation as well as the price increase for AMD's products for the period 2017 to 2019 was 4 percent.
INSTRUCTIONS:
a. Considering price increases, did sales actually increase by 26 percent from 2017 to 2019? By how much did the company's sales actually grow from 2017 to 2019? By what percent did sales increase?
b. If prices had increased 10 percent from 2017 to 201 9, what would have been the effect on the growth of sales?
c. Describe how the stable dollar assumption could have misled the users of AMD's financial statements.
Step by Step Answer:
a Considering price increases sales did not actually increase by 26 pe...View the full answer
