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Following is information from Best Industries for Year 1. Total Year 1 revenue $1,977,040 Projected revenue growth rate, for next five years 3% Terminal revenue growth rate, after year 5 1% Net operating profit margin (NPM) 6.4% Net operating asset turnover (NOAT) 2.35 Projected Year 3 total revenue would be Select one:

Respuesta :

Answer: $2,097,442.2

Explanation:

Projected Year 3 total revenue would be calculated thus:

Since the revenue will increase at the rate of 3% for every year and year 3, there'll be 2 years from year 1, this will then be expressed as:

= Total Year 1 revenue × (1 + 3%)²

= $1,977,040 × (1 + 0.03)²

= $1,977,040 × 1.03²

= $1,977,040 × 1.0609

= $2,097,442.2

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