Future value and present value concepts are applied in various ways, such as calculating growth rates, earnings per share, expected sales and revenues in the future, and so forth.
Consider the following case:
Pharmacist John S. Pemberton invented a soft drink in 1886 that eventually became not only an integral part of everyday life in the United States but also a symbol of consumerism worldwide. In 1929 the first Coca-Cola vending machines were installed in Germany, and in 1930, the German branch of the Coca-Cola Co. opened in Essen.
Coca-Cola sales in Germany were 243,000 cases in 1934, 1 million cases in 1936, and 4.5 million cases in 1939.
Germany was a growing market for Coca-Cola, along with other countries in Europe, before World War II. With the previous data given, calculate the company’s sales growth rate for each time period in the following table:
Years
Growth Rate
1934–1936
1936–1939
1934–1939