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Onlywhiteshirts Inc. sells one product: white shirts. It had revenues of $50 million last year. This year it expects to sell 4% more shirts and it plans to raise the price of its shirts by 4%. At what rate will sales rise this year, compared to last year? (Express your answer in percentage form rounded to two decimal places.)

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Answer #1

Last year Sales = $50 m

Sales this year = Last year sales * (100%+ Increase in quantity sold)*(100%+ Increase in price of the product)

= 50m * 104%*104%

=$54.08 million

Increase in sales = (Sales this year- Last year sales)*100/ Last year sales

= (54.08-50)*100/ 50

=8.16%

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