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Section 3 Short questions (Total 16 points) Question 1 (8 points) Alpha Mail is a company selling anti-virus software. The business of anti-virus is booming and its annual growth rate is expected to be 100 basis points above the general economic growth rate in the real term. Economists expect the real GDP to grow at 3% per year and the inflation rate to be 2.5% per year in the long run. In 2020, the total market size of anti-virus software was $10.500 million. Alpha Mail had a market share of 5% in 2020. Alpha Mail's software offering measures up well against the competitions, both in terms of features and price. In addition, the management of the company includes the founder who has had experience in other successful software start-ups. Therefore, its market share is projected to be 10% by the end of 2024 as shown in the following table. Answer the followings: a) (5 points) Forecast Alpha Mail's revenue in 2021-24 and write down your answer in the spaces provided in the table. State your answers in 1 decimal place. Year 2020 2021 2022 2023 2024 10,500 9% 10% 5% 7% 8% Market size ($ million) Market share of Alpha Mail Alpha Mail's revenue b) (3 points) Do you use a top-down, a bottom-up, or a hybrid approach for your revenue forecast for Alpha Mail in part (a)? Explain yourStep by Step Solution
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