A forecast using a percentage of sales model expects sales to increase by 4.8% annually over the next 4 years. If costs are proportional to sales at 80%, and last year\'s sales were $2,200, the net income in the fourth year will be: (Do not round intermediate calculations.) $530.76. $433.52. $506.45. $336.28. Solution Particulars Last Year*1.048= Year 1*1.048= Year 2*1.048= Year 3*1.048= Year 4 Sales 2200.00 2305.60 2416.27 2532.25 2653.80 Cost -Proprtional to sales -80% 1760.00 1844.48 1933.02 2025.80 2123.04 Net Income 440.00 461.12 483.25 506.45 530.76 Thus, fourth Year Net Income is $ 530.76 .

1. A forecast using a percentage of sales model expects sales to increase by 4.8% annually over the
next 4 years. If costs are proportional to sales at 80%, and last year's sales were $2,200, the net
income in the fourth year will be: (Do not round intermediate calculations.)
$530.76.
$433.52.
$506.45.
$336.28.
A forecast using a percentage of sales model expects sales to increase by 4.8% annually over the
next 4 years. If costs are proportional to sales at 80%, and last year's sales were $2,200, the net
income in the fourth year will be: (Do not round intermediate calculations.)
Solution
Particulars Last Year*1.048= Year 1*1.048= Year 2*1.048= Year 3*1.048= Year 4 Sales
2200.00 2305.60 2416.27 2532.25 2653.80 Cost -Proprtional to sales -80% 1760.00 1844.48
1933.02 2025.80 2123.04 Net Income 440.00 461.12 483.25 506.45 530.76 Thus, fourth Year
Net Income is $ 530.76