Alexandra_Munoz_BADM5190_3512_P14_10 - Chapter 14. Ch 14-10...

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Chapter 14. Ch 14-10 Build a Model Here are the company's historical sales. Hint: Use the Trend function to forecast sales for 2005. Year Sales Growth Rate 1999 129,215,000 2000 180,901,000 40.0% 2001 235,252,000 30.0% 2002 294,065,000 25.0% 2003 396,692,000 34.9% 2004 455,150,000 14.7% 2005 515,467,265 % Increase in Predicted Sales for 2005 over 2004: 2004 Sales 455,150,000 2005 Sales 515,467,265 % increase 13.25% Note: This growth rate has been declining over time. Key Input Data: Used in the forecast Tax rate 40% Dividend growth rate 8% 9% 11% December 31 Income Statements: (in thousands of dollars) Forecasting 2004 2005 2005 Cumberland Industries' financial planners must forecast the company's financial results for the coming year. The forecast will be based o the percent of sales method, and any additional funds needed will be obtained as notes payable. a. Assuming the historical trend continues, what will sales be in 2005? Base your forecast on a spreadsheet regression analysis of the 1999-2004 sales data above, and include the summary output of the regression in your answer. By what percentage are sales predicted to increase in 2005 over 2004? Is the sales growth rate increasing or decreasing? b.
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Alexandra_Munoz_BADM5190_3512_P14_10 - Chapter 14. Ch 14-10...

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