Answer :
To forecast the terminal period values for Sales, NOPAT, and NOA given a terminal period growth rate of 2%, you'll need to follow these steps:
1. Identify the values for the last year (2022) from the provided table:
- Sales for 2022: \$218,501 million
- NOPAT for 2022: \$29,225 million
- NOA for 2022: \$468,532 million
2. Apply the terminal period growth rate of 2% to these values:
- Terminal Sales: Last year's Sales \(\times\) (1 + growth rate)
[tex]\[ \text{Terminal Sales} = 218,501 \times (1 + 0.02) = 218,501 \times 1.02 = 222,871.02 \][/tex]
- Terminal NOPAT: Last year's NOPAT \(\times\) (1 + growth rate)
[tex]\[ \text{Terminal NOPAT} = 29,225 \times (1 + 0.02) = 29,225 \times 1.02 = 29,809.50 \][/tex]
- Terminal NOA: Last year's NOA \(\times\) (1 + growth rate)
[tex]\[ \text{Terminal NOA} = 468,532 \times (1 + 0.02) = 468,532 \times 1.02 = 477,902.64 \][/tex]
So the values for the terminal period (rounded to two decimal places) are:
- Terminal Sales: \$222,871.02 million
- Terminal NOPAT: \$29,809.50 million
- Terminal NOA: \$477,902.64 million
Thus, the table with the terminal period values filled in looks as follows:
\begin{tabular}{|c|c|c|c|c|c|c|}
\hline
\(\$ \) millions & \begin{tabular}{l}
Reported \\
2018
\end{tabular} & \begin{tabular}{l}
Forecast Horizon Period \\
2019
\end{tabular} & 2020 & 2021 & 2022 & \begin{tabular}{l}
Terminal \\
Period
\end{tabular} \\
\hline
Sales & \[tex]$173,681 & \$[/tex]183,926 & \[tex]$194,786 & \$[/tex]206,298 & \[tex]$218,501 & \$[/tex]222,871.02 \\
\hline
NOPAT & 23,820 & 25,007 & 26,332 & 27,737 & 29,225 & 29,809.50 \\
\hline
NOA & 371,964 & 393,856 & 417,312 & 442,176 & 468,532 & 477,902.64 \\
\hline
\end{tabular}
1. Identify the values for the last year (2022) from the provided table:
- Sales for 2022: \$218,501 million
- NOPAT for 2022: \$29,225 million
- NOA for 2022: \$468,532 million
2. Apply the terminal period growth rate of 2% to these values:
- Terminal Sales: Last year's Sales \(\times\) (1 + growth rate)
[tex]\[ \text{Terminal Sales} = 218,501 \times (1 + 0.02) = 218,501 \times 1.02 = 222,871.02 \][/tex]
- Terminal NOPAT: Last year's NOPAT \(\times\) (1 + growth rate)
[tex]\[ \text{Terminal NOPAT} = 29,225 \times (1 + 0.02) = 29,225 \times 1.02 = 29,809.50 \][/tex]
- Terminal NOA: Last year's NOA \(\times\) (1 + growth rate)
[tex]\[ \text{Terminal NOA} = 468,532 \times (1 + 0.02) = 468,532 \times 1.02 = 477,902.64 \][/tex]
So the values for the terminal period (rounded to two decimal places) are:
- Terminal Sales: \$222,871.02 million
- Terminal NOPAT: \$29,809.50 million
- Terminal NOA: \$477,902.64 million
Thus, the table with the terminal period values filled in looks as follows:
\begin{tabular}{|c|c|c|c|c|c|c|}
\hline
\(\$ \) millions & \begin{tabular}{l}
Reported \\
2018
\end{tabular} & \begin{tabular}{l}
Forecast Horizon Period \\
2019
\end{tabular} & 2020 & 2021 & 2022 & \begin{tabular}{l}
Terminal \\
Period
\end{tabular} \\
\hline
Sales & \[tex]$173,681 & \$[/tex]183,926 & \[tex]$194,786 & \$[/tex]206,298 & \[tex]$218,501 & \$[/tex]222,871.02 \\
\hline
NOPAT & 23,820 & 25,007 & 26,332 & 27,737 & 29,225 & 29,809.50 \\
\hline
NOA & 371,964 & 393,856 & 417,312 & 442,176 & 468,532 & 477,902.64 \\
\hline
\end{tabular}
