The analyst gathers data on forecasted worldwide volumes for the railroad industry for the next three years, as well as UNPs forecasted market share over the forecast horizon:

Forecasted Worldwide Rail Volume and Forecasted UNP Market Share and Average Revenue Per Car, 2017-2019 (Volume in thousands)

Worldwide Volume Average Revenue / Car UNP Market Share

E2017

45,000 $2,250 20%

E2018 E2019

46,500 48,000 $2,275 $2,300 20% 20%

The analyst forecasts long-run, nominal GDP growth at 2.5%. After a recent period of challenging times for the railroad industry, the analyst expects moderate industry volume growth such that freight revenue growth will outpace long-run nominal GDP growth by 110 basis points each year over the next 3 years.

7.) What is the forecast for freight revenue for UNP for 2019 using the growth relative to GDP growth method? (1.5 points)

8.) What is the forecast for freight revenue for UNP for 2019 using the market growth and market share method?