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Hi sir, could you please check the below question and get me the answer?
Prior year revenue is $1.8m. One third of this is through online sales and the rest through warehouse sales. The forecast revenue for the current year is expected to increase by 25% through online sales and they have extended the production with fifth warehouse and revenue from that is expected to be in line with others. Calculate the proof in total revenue forecast.
As worded, it could be trying to say increase by 25% of the online sales $0.6m = $0.15m so forecast would be $1.95m
Or it could mean increase by 25% of $1.8 = $0.45, so total is $2.25m. In this case the % increase in online sales would be 75%.Presumably this relates to an OT Q that you are recollecting – I really don’t think it helps to dwell on recollection because I am sure the actual wording would have been clear.
This is how I arrived at the answer.
Online sales – (0.6*1.25) = $0.75
Warehouse sales – (1.2/4) = $3 from one warehouse, because they had told the fifth warehouse was opened this year. So, in the previous year it must be four. Therefore, (1.2/4)*5 = $1.5So in total – 1.5+0.75 = $2.25.
Can’t this be okay?
I don’t see that it matters how it is worked out – except to accept the literal statement is simpler to derive the total:
“The forecast revenue for the current year is expected to increase by 25% …” – my derivation of 2.25
“… through online sales and they have extended the production with fifth warehouse and revenue from that is expected to be in line with others” – your derivation of 2.25
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