The new CEO of a high-tech incubator company wants to entice venture capitalists by promising a growth rate of 40% per year for at least 3 years. Therefore, the company’s MARR was set at 40%. If this ROR was actually realized, but the CEO did not account for the observed 8% per year inflation rate, what was the real growth rate?

The new CEO of a high-tech incubator company wants to entice venture capitalists by promising a growth rate of 40% per year for at least 3 years. Therefore, the company’s MARR was set at 40%. If this ROR was actually realized, but the CEO did not account for the observed 8% per year inflation rate, what was the real growth rate?

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter2: The One Lesson Of Business

Section: Chapter Questions

Problem 2.6IP

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