Question

If changing market conditions cause a company earning $7,000,000 in 2018 to project a loss of 4% of its profit in each of the next 5 years, what profit does it project in 2023? (Round your answer to the nearest dollar.)

Answer 1

Answer:

$5,707,609

Explanation:

The computation of the profit for 2023 would be

Given that  

Earning in 2018 = $7,000,000

Loss = 4%

So, the profit = 96%

For 2019 = $7,000,000 × 0.96 = $6,720,000

For 2020 = $6,720,000 × 0.96 = $6,451,200

For 2021 = $6,451,200 × 0.96 = $6,193,152

For 2022 = $6,193,152 × 0.96 = $5,945,425.92

For 2023 = $5,945,425.92 × 0.96 = $5,707,609