Buckeye Manufacturing Expects to Generate Additional Revenue from Its Recently

question 13

Short Answer

Buckeye Manufacturing expects to generate additional revenue from its recently won government contract. Buckeye forecasts that the revenue will be $40 million in the first year, but will decline by $10.5 million every year for the next 3 years. What is the future worth of total revenue at the end of 3 years in actual dollars if the real interest rate is 2% per year and the average rate of inflation is 11.25% per year?

---

Definitions:

Arithmetic Operations

Basic mathematical operations including addition, subtraction, multiplication, and division.

Exponential Notation

A mathematical way to write numbers using powers of a base number, commonly used for expressing very large or very small values.

Arithmetic Operations

Basic mathematical procedures including addition, subtraction, multiplication, and division.

Complex Arithmetic

Mathematical operations that involve complex numbers, which are numbers that have both real and imaginary parts.