Cumulative Inflation Factor for Comparable Data. Review Table 14-3 and the accompanying text.

Marquit Two hospitals report their annual projected revenue for five years to the local newspaper for a story on the areas future economic outlook. However, Hospital One has applied a cumulative inflation factor of five percent per year while Hospital Two has not applied any inflation factor.

Thus the information is not properly comparable.

Projected Revenue Year 1 Year 2 Year 3 Year 4 Year 5

1 $20,000,000 $22,500,000 $27,500,000 $27,500,000 $30,000,000

2 $20,000,000 $21,000,000 $25,000,000 $24,000,000 $26,000,000

Required Revise Hospital 2s projections by applying a cumulative inflation factor of five percent per year.