A deli made $320,000 in revenue last year. Due to the increased popularity of the deli, the owner predicts that revenue will increase by 23% next year. How much revenue does the owner think the deli will generate next year? O $320,230 O $322,300 O $343,000 O $393,600 O $422,400
A deli made $320,000 in revenue last year. Due to the increased popularity of the deli, the owner predicts that revenue will increase by 23% next year. How much revenue does the owner think the deli will generate next year? O $320,230 O $322,300 O $343,000 O $393,600 O $422,400
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:A deli made $320,000 in revenue last year. Due to the increased popularity of the deli, the owner predicts that revenue will
increase by 23% next year. How much revenue does the owner think the deli will generate next year?
O $320,230
O $322,300
O $343,000
O $393,600
O $422,400
Expert Solution
Step 1
In the given case, we have provided the revenue for last year along with the growth rate of revenue for next year .
Since as per the given information , due to increased popularity of deli , the owner predicts that revenue will increase by 23% next year.
It means growth rate of revenue for next year is 23%.
So,
Revenue for next year = Revenue for last year * (1+ growth rate of revenue for next year)
Explanation:
Revenue is the sales or the turnover of the company . If the growth rate of revenue increases , it means revenue for next year is also increased.
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