Problem $01-17($algo$)$

The head of the accounting depurtment at a major software manufacturer has asked you to put together a pro forma statement of the company's value under several possible growth scenarios and the assumption that the company's many clivisions will remain a single entity forever. The manager is concerned that, despite the fact that the firm's competitors are comparatively small, collectivety their annual revenue growth has evereeded $50$ percent over each of the last five years. She has requested that the value projections be based on the firm's current profits of $$3\mathrm{.}3$ billion $($which have yet to be paid out to stockholders$)$ and the average irterest rate over the past $20$ years i$8$ percent$)$ in each of the following profig growth scenanos:

a$.$ Profits grow at an annual rate of $10$ percent. $($This one is tricky$)$

$q,0$

Instructions: Enter your responses rounded to two decomal places.

b$.$ Profits grow at an annual rate of $3$ percent.

$$ billon

c$.$ Profits grow at an annual rate of $0$ percent.

billion

d$.$ Profits decline at an annual rate of $5$ percent.

brion