Drug Company A drug company is producing a new drug. The company has made the following assumptions:
• Year 1 sales will total 1,000,000 units.
• Analysts estimate that in years 2-5, sales will increase over the previous year’s sales.
• In years 6-7 sales will decline from the previous year’s sales.
• During the growth period, sales will grow at a rate of 15% over the previous year.
• During the decline period, sales will decline at a rate of 10% from the previous year.
Write a logical formula that correctly models the analysts sales projections.
TIP: Remember when we talk about percentage growth or percentage decline, we’re talking about 1 + whatever percentage of growth or decline. For example, if a dog weighs 50 pounds in its first year, and will grow 25% in its second year, it’s Year 2 weight is 1 + 25% ( or 1.25) * 50 or 62.5 pounds. Similarly, if you’re calculating decline, the value is 1- the decline % * the prior year. If the dog loses 10% of its weight in Year 3, its new weight will be (1-.10)*62.5, or 56.25. TIP: If you correctly use absolute cell references you should only have to create a single formula and be able to copy and paste it across the entire table! Warning! Don’t use constants in your formula(s)! Only cell references.