CFA Practice Question

There are 96 practice questions for this study session.

CFA Practice Question

An IT company's market share stands at 10% of a $1bn market in 2013. The overall industry is expected to grow at a rate of 1%. The company expects that its innovative products coupled with aggressive marketing will allow it to increase its market share by 5% each year. What will its revenues be for the year of 2017?
A. $104.6 million.
B. $126.5 million.
C. $119.3 million.
Explanation: The market size will be 1,000m x (1.01)4 = $1,040.6m. The company's market share will be 10% x 1.054 = 12.16%. The annual revenue in 4 years will be 1,040.6 x 12.16% = $126.5m.

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