Question

IronBridge Holdings had sales of 116,883 last year and expect sales growth of 0.12 going forward. How long will it take IronBridge to double their sales at this rate?

Answer 1

Last year Sales = $116,883

Expected sales growth rate for future = 0.12

Calculate no of years it will take to double the sales:-

Double sales = Last year Sales*(1+Growth Rate)^(n)

where, n = No of years

($116,883*2) = $116,883(1+0.12)^n

2 = (1+0.12)^n

Taking Log on both sides,

Log(2) = n*Log(1.12)

0.301030 = n*0.04921802

n = 6.12 years

SO, it will take 6.12 years to double the sales.

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