Exercise 5.2
Fred's Hardware and Hobby House expects its sales to increase ata constant rate of 8 percent per year over the next three years.Current sales are $500,000.
Complete the following table by forecasting sales for each ofthe next three years.
Year | Forecasted Sales |
|---|
(Dollars) |
|---|
| 1 | |
| 2 | |
| 3 | |
If sales in 2003 were $300,000 and they grew to $500,000 by 2007(a four-year period), the actual annual compound growth ratewas:
10.76%
13.62%
18.56%
Which of the following are some of the hazards of employing aconstant rate of growth forecasting model? Check all thatapply.
It assumes that there are no cyclical variations.
It ignores seasonal trends.
It is ill-suited to estimate secular trends.
