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:

Online Service

A service provided over the internet, enabling users to access support or resources without physical transactions.

Drive Lug

A projection or pin on a wheel, gear, or drive shaft that engages with another component to transmit motion or power.

Air Gun

A tool that uses compressed air to project force, often used for nailing, painting, or cleaning applications.

Ratchet

A mechanical device that allows continuous linear or rotary motion in one direction while preventing motion in the opposite direction.