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Hey Chegg,

I know that Star River's sales will grow at 15% each year.

On the historical income statement for fiscal year ended June 30 (SGD 000), I know that sales in year 2001 is 106,042. In order to find sales in year 2002, I multiplied 106,042 (1 + 15%) = 121,948. In order to find sales in year 2003, I multiplied 121,948 (1 + 15%) = 140,240.

I also know, as it mentions, that Star River had begun to experiment with DVD manufacturing, but DVDs still accounted for less than 5% of its sales at fiscal-year end 2001.

Now, I did some research on the rise of DVDs and how electronic companies began manufacturing it from 1997-2005. I found a table that shows that units are increasing each year, the average unit price is increasing, and total U.S. market is increasing.

Question:

Taking into account what you read and what I pointed out, as well as the table depicted above, Star River wants to manufacture DVDs, so how is DVD sales or DVD player sales in 2002 (2,175) and 2003 (2,346) going to impact Star River sales in 2002 (121,948) and 2003 (140,240)? Please show work if you can or explain in detail if you can. The more explanation, the better.