Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Future value and present value concepts are applied in various ways, such as calculating growth rates, earnings per share, expected sales and revenues in the

image text in transcribed
image text in transcribed
Future value and present value concepts are applied in various ways, such as calculating growth rates, earnings per share, expected sales and revenues in the future, and so forth. Consider the following case: Pharmacist John S. Pemberton invented a soft drink in 1886 that eventually became not only an integral part of everyday life in the United States but also a symbol of consumerism worldwide. In 1929 the first Coca-Cola vending machines were installed in Germany, and in 1930, the German branch of the Coca-Cola Co. opened in Essen. Coca-Cola sales in Germany were 243,000 cases in 1934, 1 million cases in 1936, and 4.5 million cases in 1939. Germany was a growing market for Coca-Cola, along with other countries in Europe, before World War II. With the previous data given, calculate the company's sales growth rate for each time period in the following table: (Hint: Round your answer to two decimal places.) Growth Rate Years 1934-1936 1936-1939 1934-1939 (Source: "Coca-Cola GmbH and World War Two," https://web.archive.org/web/20090306152728/www.gettherealfacts.co.uk/docs/gmbh.pdf) During World War II, Coca-Cola Co, cut off all syrup sales to Germany in 1940, resulting in no sales from 1943 to 1945. If Coca-Cola's sales had grown from 1939 to 1945 at the same rate that they grew between 1934 and 1939, its sales in 1945 would have been approximately During World War II, Coca Cola Co, cut off all syrup sales to Germany in 1940, resulting in no sales from 1943 to 1945. If Coca-Cola's sales had grown from 1939 to 1945 at the same rate that they grew between 1934 and 1939, its sales in 1945 would have been approximately cases. (Hint: Use sales data from 1939 as the present value.) Coca-Cola's worldwide sales as of December 31, 2011, were 26.7 billion cases. Assume the following sales distribution: Unit Case Volume Eastern Europe 20% Germany 16% Spain 14% Great Britain 12% Italy 9% France 8% Other 21% If Coca-Cola's worldwide growth were to continue at the same growth rate as it did in Germany between 1939 and 2008, when sales grew at the rate of 10.26%, its hypothetical sales in Germany in 2053 (42 years from 2011) would be approximately billion cases. (Note: For this question, ignore other factors that affect sales.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Applied Conic Finance

Authors: Dilip Madan, Wim Schoutens

1st Edition

1107151694, 978-1107151697

More Books

Students also viewed these Finance questions