Connor Corp. has large amount of data that they are trying to analyze from the last 15 years. They have an arithmetic sales growth average of 12% and a geometric average growth of 9%. Using Blume's formula, what would the forecast sales growth be for the next five years?

Question

Business

Diego Orr

20 June, 10:40

Connor Corp. has large amount of data that they are trying to analyze from the last 15 years. They have an arithmetic sales growth average of 12% and a geometric average growth of 9%. Using Blume's formula, what would the forecast sales growth be for the next five years?

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Answers (1)

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Angelique Randolph · Answer 1

Answer: sale growth rate = 10.82%

Explanation:

blume's formula = ((t - 1) / (n - 1)) x arithmetic r + geometric r x (n - t) / (t - 1)

blume formula = ((5 - 1) / (15 - 1)) x 0.09 + 0.12 x (15 - 5) / (5 - 1)

Blume formula = 10.82%