Make the following base-case assumptions to forecast 2020 to 2023 (please highlight answers in yellow):

(a) Google will experience 30% year-over-year (YOY) revenue growth starting from2019 and continuing through 2023.

(b) Google gross margin (Gross Profit / Revenue, which is 1-(cost of sales/revenues))will stabilize at 23% from 2019 onward.

(c) Product development costs will be 6% of revenues in 2020 and 5% of revenues after that.

(d) Sales and Marketing Expenses will be 11% of revenues in 2020 and 10% of revenues after that.

(e) General and Administrative will be 4% of revenues in 2020, 3.5% in 2021, and then will stabilize at 3% of revenues.

(f) Depreciation will be 1.1% of revenues.

(g) Google is headquartered in Sweden, so assume a 26% tax rate and ignore any carryforwards.

A B C D E 2016 2017 2018E 2019E 3232 2483 749 207 418 1 2 Revenues 3 Cost of Revenues 4. Gross Profit 5 Product Development 6 Sales and Marketing 7 General and Admin 8 Depreciation 9 Total Operating Expenses 10 Operating Income 11 Taxes 12 Net Income 4574 3544 1030 297 572 195 51 1115 -85 6306 4864 1442 401 737 263 67 1467 -25 8015.7 6228 1787.7 504 878 328 88 1794 -6.3 137 38 800 -51 -51 -85 -25 -6.3