1. Armaplex Security Company hired to forecast their revenues and expenses for the next two years. The following information is provided to you related to revenues and expenses: 2016 2017 2018 2019 2020 2021 Revenues $1.5 million $1.9 million $2.7 million $2.3 million $1.4 million $1.7 million Inflation Rate 2% 2.5% 3% 2.4% 1.9% GDP Growth Rate 3% 4% 5% 3% 2% The expected Inflation rate and GDP Growth Rate of 2022 are 2% and 3% respectively. The expected Inflation rate and GDP Growth Rate of 2023 are 1.5% and 4% respectively. Expenses of the company include both fixed and variable expenses. In 2021, the following expenses were recorded: Salaries and Wages (Commission based) - $150,000 Office Rent - $100,000 Depreciation Expense - $50,000 Delivery Expense (Products) - $20,000 . Using the above information calculate the following: a) Using the 5-year average growth rate, forecast the revenue and expenses of Armaplex for 2022 and 2023. (4) b) Using the 5-year average real growth rate, forecast the revenue and expenses of Armaplex for 2022 and 2023. (4) c) Which of the two methods do you think is more effective in forecasting and why? (2) 1. Armaplex Security Company hired to forecast their revenues and expenses for the next two years. The following information is provided to you related to revenues and expenses: 2016 2017 2018 2019 2020 2021 Revenues $1.5 million $1.9 million $2.7 million $2.3 million $1.4 million $1.7 million Inflation Rate 2% 2.5% 3% 2.4% 1.9% GDP Growth Rate 3% 4% 5% 3% 2% The expected Inflation rate and GDP Growth Rate of 2022 are 2% and 3% respectively. The expected Inflation rate and GDP Growth Rate of 2023 are 1.5% and 4% respectively. Expenses of the company include both fixed and variable expenses. In 2021, the following expenses were recorded: Salaries and Wages (Commission based) - $150,000 Office Rent - $100,000 Depreciation Expense - $50,000 Delivery Expense (Products) - $20,000 . Using the above information calculate the following: a) Using the 5-year average growth rate, forecast the revenue and expenses of Armaplex for 2022 and 2023. (4) b) Using the 5-year average real growth rate, forecast the revenue and expenses of Armaplex for 2022 and 2023. (4) c) Which of the two methods do you think is more effective in forecasting and why? (2)