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Answer :
Final answer:
To forecast revenue in 2017 using the given financial model, future value calculations need to be considered including interest rate and time period. The firm expects to receive a certain amount over the coming years, and the model also mentions a profit-maximizing output level. However, without specific cost and output level data for 2017, a definitive revenue forecast is not possible.
Explanation:
In order to forecast revenue in 2017, you first need to understand the entire financial model provided. Since the model includes both present and future numbers, it's important to consider future value calculations, which consider the amount received in the future (1 + the interest rate), compounded over the number of years (t).
From the given values, we know the firm expects to receive $15 million in the present, $20 million in one year and $25 million in two years. Additionally, the model also mentions a profit-maximizing output level and its corresponding profit.
For the purpose of calculation, assuming an interest rate, you would add the present value to the future values discounted back to present. However, without more specific data on cost and output levels for 2017, a precise forecast cannot be calculated.
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Thank you for reading the article Instructions Questions 1 4 use the financial model on tab Q1 4 in the Exam Workbook Complete the model by filling in the blank cells. We hope the information provided is useful and helps you understand this topic better. Feel free to explore more helpful content on our website!
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Rewritten by : Jeany
1. The completion of the financial model with the Sales Units and Sales Revenues is as follows:
Financial Model (showing the Sales Units and Sales Revenue)
2014 2015 2016 2017 2018
Sales units 200,000 210,000 237,300 272,895 297,456
Sales Revenue 9,998,000 10,497,900 11,862,627 13,642,021 14,869,825
2. The forecast revenue in 2017 is $13,642,021.
Data and Calculations:
2014 2015 2016 2017 2018
Growth Rate of Units Sold: 5% 13% 15% 9%
Sales units 200,000 210,000 237,300 272,895 297,456
Sales Price per unit = $49.99
Sales Revenue 9,998,000 10,497,900 11,862,627 13,642,021 14,869,825
The sales revenue = Sales Units x Sales Price per unit.
Thus, the forecast revenue in 2017 is $13,642,021.
Learn more about forecasting revenue in future years at https://brainly.com/question/11033682
