Sales in a company are $196 million in 2013 and increase to $198 million in 2014....
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Sales in a company are $196 million in 2013 and increase to $198 million in 2014. a. Compute the percentage increase in sales, using the usual formula (Sales2014 – Sales2013) Sales2013 100 x Compare this value to the approximation 100 x [In (Sales2014) – In (Sales2013). b. Repeat (a), assuming that Sales2014 = 205, Sales2014 = 250, and Sales2014 = 500. c. How good is the approximation when the %3D change is small? Does the quality of the approximation deteriorate as the percentage change increases? 198-196 8.1. (a) The percentage increase in sales is 100x- =1.0204%. The approximation 196 is 100 x [In (198) – In (196)] = 1.0152%. (b) When Sales2014 = 205, the percentage increase is 100x2 05– 196 – 4.5918% and 196 the approximation is 100 x [In (205) – In (196)] = 4.4895%. When Salesz014 = 250, the percentage increase is 100x 250 196 – 27.551% and the approximation is 100 x [In (250) – In (196)] = 24.335%. When Sales2014 = 500, the percentage increase is 100x 500 –196 =155.1% and the approximation is 196 100x[In(500)-In(196)] = 93.649%. (c) The approximation works well when the change is small. The quality of the approximation deteriorates as the percentage change increases. Sales in a company are $196 million in 2013 and increase to $198 million in 2014. a. Compute the percentage increase in sales, using the usual formula (Sales2014 – Sales2013) Sales2013 100 x Compare this value to the approximation 100 x [In (Sales2014) – In (Sales2013). b. Repeat (a), assuming that Sales2014 = 205, Sales2014 = 250, and Sales2014 = 500. c. How good is the approximation when the %3D change is small? Does the quality of the approximation deteriorate as the percentage change increases? 198-196 8.1. (a) The percentage increase in sales is 100x- =1.0204%. The approximation 196 is 100 x [In (198) – In (196)] = 1.0152%. (b) When Sales2014 = 205, the percentage increase is 100x2 05– 196 – 4.5918% and 196 the approximation is 100 x [In (205) – In (196)] = 4.4895%. When Salesz014 = 250, the percentage increase is 100x 250 196 – 27.551% and the approximation is 100 x [In (250) – In (196)] = 24.335%. When Sales2014 = 500, the percentage increase is 100x 500 –196 =155.1% and the approximation is 196 100x[In(500)-In(196)] = 93.649%. (c) The approximation works well when the change is small. The quality of the approximation deteriorates as the percentage change increases.
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Related Book For
Intermediate Accounting
ISBN: 978-0077400163
6th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson
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