Hi guys
I have a simple question on CFAI EOC question 16 in Reading 33, SS11. The question asks for the factor that best fits for company’s 5-year horizon, but the answer choses the one about how the industry will grow in the next 10 years. I don’t see how is that suitable. Can anyone explain? Thanks a lot.
The question is related to the forecast of Omrikoon that has launched electric vehicles in 2014, out of all 3, factor 2 which states the high growth rate of electric vehicles is the most important factor in the forecast of electric vehicles, factor 1 is irrelevant and factor 3 is another mode of revenue (2%) which is not related to forecast of electric vehicles. Given th ehigh growth of electric vehicles, the revenue number of omrikoon would go high given the fact the competitiors would enter by 2016
Hope that helps?
I could understand how Factor 2 is relevant (although it’s more of a 10-year plan rather than 5-year plan), but Factor 3 talks about the new product it’ll launch in 2016, which is till within the 5 year time horizon from 2014?