We sometimes need to find how long it will take a sum of money (or anything else) to grow to some specified amount. For example, if a company's sales are growing at a rate of 20% per year, how long will it take sales to double?

We sometimes need to find how long it will take a sum of money (or anything else) to grow to some specified amount. For example, if a company's sales are growing at a rate of 20% per year, how long will it take sales to double?

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter13: Other Financing Alternatives

Section: Chapter Questions

Problem 1bM

See similar textbooks

Related questions

Q: Finally, assume that the new product line isexpected to decrease sales of the firm’s otherlines by…

A: Incremental cash flow is the additional cash flow that occurs when a company starts a new project.

Q: What are the projected sales for the last year before the sale?

A: Future Value: It represents the future worth of the present amount of cash flow. It is calculated…

Q: Verizon Communications said it plans to spend $22.9 billion to expand its fiber-optic Internet and…

A: F=PF/P i, n P=CustomersAverage IncomeP/A i, n+CustomersAverage IncomeCustomer baseP/G i,…

Q: You are upgrading to better production equipment for your firm's only product. The new equipment…

A: Incremental Revenue = ( Current sales * Sales increase percentage ) * Sales price per unit

Q: If a company's sales are growing at a rate of 20% annually, how long will it takes sales to double?

A: Future Value = Present Value * (1+r)^n let PV =1, than FV be 2

Q: a the goal of the firm Wendy Winter needs to determine whether the current warehouse system should…

A: Since you have posted a question with multiple sub-parts, we will solve the first three subparts for…

Q: A recently hired chief executive officer wants to reduce future production costs to improve the…

A: Here, Interest Rate is 10%

Q: You see an estimate that hourly wage rates will increase by 6 percent next year. What other…

A: An Operating Profit Margin seems to be an estimate about just how much money a firm will have…

Q: One of your company's managers says that a $120,000 piece of machinery will be paid off in 12 months…

A: When the timing of cash flows differs, it is important to compute the present value of these cash…

Q: If an investment project costs a firm £200 and yields a stream of profits of £100 per year for the…

A: Internal rate of return(IRR) is one of the techniques of capital budgeting that take into…

Q: You purchase a machine. It costs $75,000 and will expand cash flow by $1,000 /month in year 1…

A: To Find: NPV IRR

Q: Companies such as GE that have huge amounts of cash flow every day base their financial calculations…

A: Effective annual rate = ert - 1 Where, Effective annual rate = 25% e = exponential function r =…

Q: How much value would be added to a firm that could permanently reduce its cash collection period by…

A: Given: Average collection per day =$10000Required to reduce collection period by =2 days

Q: Annual revenues in our company are $1.5 million this year. If they are expected to grow at a…

A: Future Value = Present Value * (1+rate)^years

Q: if a company's sales are growing at a rate of 10% annually, how long will i take sales to double

A: The above information indicates that sales of the company are growing and the approximate year it…

Q: what would have been the maximum amount that should be invested? Use interest rate of 9% compounded…

A: A stream of equal cash flows (CF) paid or received periodically is termed as annuity. Ordinary…

Q: Your company's sales are forecasted to increase by 13.00% next year. Accrued wages were $16.20…

A: Wages are the amount paid to the labor against the work done by the labor in the factory. Accrued…

Q: A retail coffee company is planning to open new coffee 95 outlets that are expected to generate…

A: Solution:- Net Present Value (NPV) means the net value in today’s terms after adjusting initial…

Q: The market volume for widgets is increasing by 15% per year from current profits of $300,000.…

A: Year Current Profit Sample Working Profit in case of design change Sample Working Extra Cash Flow =…

Q: The company you work for is considering a new product line projected to have the net cash flows…

A: Computation:

Q: Quick Computing currently sells 17 million computer chips each year at a price of $11 per chip. It…

A: Cash flows are the movement of real or virtual money within the organization due to business…

Q: A company expects a constant FCF of $240 million per yearforever. If the WACC is 12%, what is the…

A: Given information: Free cash flows amounted to $240 million WACC of the firm is 12%

Q: The price of computers has been dropping steadily for the past ten years. If a desktop PC cost…

Q: Quick Grow is in an expanding market , and its sales are increasing by 25% per year. Would the net…

A: The sales of the company is increasing at a high growth rate of 25%, this means the company will…

Q: You are upgrading to better production equipment for your firm's only product. The new equipment…

A: Incremental revenue is the amount of revenue earned from the units sold over and above the current…

Q: A machine having a first cost of $20,000 is expected to save $1500 in the first year of operation,…

A: Information Provided Machine first cost = $20,000 Savings in the first year = $1500 Increment in…

Q: A fashion label is considering inclusive sizing which would expand its offerings to plus size and…

A: The break-even no. of pieces will be that number for which the NPV is nil. NPV is net present value.

Q: How much money could a maker of super- conducting magnetic energy storage systems afford to spend…

A: Present value refers to the current valuation for a future sum. Investors determine the present…

Q: Sharpe Knife Company expects sales next year to be $1,620,000 if the economy is strong, $860,000 if…

A: Expected level of sales can be calculated as the sum of product of probability of respective…

Q: The market for widgets is increasing by 15% per year from current profits of $2,000,000. Investing…

A: Given information : Incremental rate = 15% Current profits = $2,000,000 Expected decline in price =…

Q: A fast food restaurant feels they could increase their profits by introducing ice cream. The…

A: Given: Year Particulars Amount 0 Initial investment -$250,000 1 Cash inflows $125,000 2…

Q: A recently hired chief executive officer wants to reduce future production costs to improve the…

A: Here, The Interest Rate is 12% Investment today is $86,000 Investment from year 1 to 5 is $66,000…

Q: An equipment is estimated to cost $300,000 four years from now and an additional $100,000 five years…

A: Introduction: Present value refers to the current valuation for a future sum. Investors determine…

Q: A maker of mechanical systems can reduce product recalls by 25% if it purchases new packaging…

A: Given information : Reduction rate = 25% Expected cost = $40,000 Time period = 4 years Minimum…

Q: 1. Your company has developed the next great innovation in thermocouple technology. They are very…

A: Equivalent annual value = r * NPV / 1 - (1+r)^(-n) where r = interest rate NPV = net present value…

Q: Please show all equations and work as needed. Make the correct answer clear. If possible, please…

A: The present value (PV) of future cash inflows is calculated by dividing the future cash flows with…

Q: . We sometimes need to find out how long it will take a sum of money (or anything else) to grow to…

A: Future value can be determined by present value and interest rate and period.we can determine period…

Q: We sometimes need to find how long it will take a sum of money (or anything else) to grow to some…

A: In the event that the organization's business increments its sales at a pace of 20 percent every…

Q: If a company's sales are growing at a rate of 20% annually, how long will it take sales to double?

A: Present Value refers to the value of cash flows today which is to be received at some future time…

Q: Suppose you were considering purchasing a $5000 machine today that would generate additional net…

A: Given information, Cost of machine = $5,000 Expected rate of return = 15% Additional net profit per…

Q: How much will be the equivalent worth of ₱2M invested today for three years at a commercial rate of…

A: The equivalent worth of the amount can be calculated using the formula of the future value.

Q: You are purchasing a factory at $550,000. Your projected cash flow streams from the factory will be…

A: Rate of Return for an investment is the yield rate. Every investment decision is based on the return…

Q: Oriole Sales Company has sales of $1,750,000. If the company’s management expects sales to grow 7.00…

A: Given Sales=$1,750,000 Growth rate=7% p.a. Required sales=$1,750,000×2=$3,500,000

Q: 3. Suppose your company expects to increase unit sales of widgets by 15% per year for the next 5…

A: As per the time value of money, a dollar is worth more today than the same dollar in the future.…

Question

100%

We sometimes need to find how long it will take a sum of money (or anything else) to grow to some specified amount. For example, if a company's sales are growing at a rate of 20% per year, how long will it take sales to double?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Calculation for time taken to double the sales

VIEW

Step 2: Time required to double the sales is

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

Towson Industries is considering an investment of $256,950 that is expected to generate returns of $90,000 per year for each of the next four years. What Is the Investments internal rate of return?
c. We sometimes need to find how long it will take a sum of money (or anything else) to grow to some specified amount. For example, if a company's sales are growing at a rate of 20 percent per year, how long will it take sales to double?
If a company's sales are growing at a rate of 20% annually, how long will it takes sales to double?
In this exercise, we develop a model for the growth rate G, in thousands of dollars per year, in sales of a product as a function of the sales level s, in thousands of dollars.† The model assumes that there is a limit to the total amount of sales that can be attained. In this situation, we use the term unattained sales for the difference between this limit and the current sales level. For example, if we expect sales to grow to 4 thousand dollars in the long run, then 4 − s gives the unattained sales. The model states that the growth rate G is proportional to the product of the sales level s and the unattained sales. Assume that the constant of proportionality is 0.8 and that the sales grow to 2 thousand dollars in the long run. (a) Find a formula for unattained sales.(b) Write an equation that shows the proportionality relation for G.G =
3. We sometimes need to find out how long it will take a sum of money (or anything else) to grow to some specified amount. For example, if a company's sales for 2020 is $1000 and expected to grow at a rate of 10% per year, how long will it take sales to double?
Quick Grow is in an expanding market , and its sales are increasing by 25% per year. Would the net working capital to be increasing or decreasing, explain why?
Companies such as GE that have huge amounts of cash flow every day base their financial calculations on continuous compounding. If the company wants to make an effective 25% per year, compounded continuously, what nominal daily rate of return has to be realized? Assume 365 days per year.
if a company's sales are growing at a rate of 10% annually, how long will i take sales to double
HS Shipping wants to expand as soon as it can save $112 million. Towards that goal, the firm started saving three years ago and currently has $38.2 million saved. Starting today, the firm will add $15,000 a month to this savings account. The rate of return is 7.1 percent, compounded monthly. How long will it be from now before the company can expand?
If a company expects to increase sales by $7,000 per year over a 10-year planning horizon, what will be the cash flows at the end of every year?
Leyton Lumber Company has sales of $12 million per year, all oncredit terms calling for payment within 30 days, and its accounts receivable are $1.5 million.What is Leyton’s DSO, what would it be if all customers paid on time, and how much capitalwould be released if Leyton could take action that led to on-time payments?
How much will be the equivalent worth of ₱2M invested today for three years at a commercialrate of 10% compounded quarterly? 1. A manufacturer of toilet flush valves wants to have ₱15,000,000 available 10 years from now so that a new product line can be initiated. If the company plans to deposit money each quarter from now, how much will it have to deposit each year if money is worth 7% compounded quarterly in order to have it available immediately at the end of 10 years?