Question

Cameroon Corp. manufactures and sells electric staplers for $15.50 each. If 10,000 units were sold in December, and management forecasts 4% growth in sales each month, the dollar amount of electric stapler sales budgeted for February should be:

Multiple Choice

• $181,328

• $161,200

• $174,354

• $167,648

• $155,000

Answer 1

We use the formula:
A=P(1+r/100)^n
where
A=future value
P=present value
r=rate of interest
n=time period.

Sales for February=10,000*(1.04)^2

=10816 units

Hence total sales for February=10816*$15.5

=$167,648