Question: You are construction a free cash flow model to value a possible acquisition target. Your managers has askied you to consider two way to forecast

You are construction a free cash flow model to value a possible acquisition target. Your managers has askied you to consider two way to forecast sales as part of the free cash flow forecast

1. You are constructing a free cash flow model to value a possible acquisition target. Your manager has asked you to consider two ways to forecast sales as part of the free cash flow forecast. These are: SALES,SALES (1 + gs,) SALES, =SALES-I . (I +%).(I +p) g, is growth rate in sales in period t, v, is growth rate in volume in period t, and p, is growth rate in price in period t. Draft a memo to discuss the pros and cons of each approach

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