Figure

Microsoft Corp. Sales Revenue, 1984-2001

Sales revenue ($ billions)

Sales revenue ($ billions)

Year

period, it is possible to forecast firm sales for future periods. To do so, it is important to realize that in this model, t = 1 for 1984, t = 2 for 1985, and so on. This means that t = 0 in the 1983 base period. To forecast sales in any future period, simply subtract 1983 from the year in question to determine a relevant value for t.

For example, a sales forecast for the year 2005 using Equation 6.2 is t = 2005 - 1983 = 22 S2005 = -$6,440.8 + $1,407.3(22) = $24,520 million

Similarly, a sales forecast for Microsoft in the year 2010 is t = 2010 - 1983 = 27 S2008 = -$6,440.8 + $1,407.3(27) = $31,556 million

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