A special order offering to buy 112,000 units has been received from a foreign distributor. The only selling costs that would be
1 answer:
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Answer:
5%
Explanation:
Data provided in the question:
Present value of the company, PV = $300,000
Current Profits, π₀ = $11,000
Interest rate, i = 9% = 0.09
Now,
we know,
here,
g is the growth rate
on rearranging, we get
g =
on substituting the respective values, we get
g =
or
g = 0.05
or
g = 0.05 × 100%
= 5%