Answer Happy

[6 marks] After analysing the company’s forecasts, Chalten’s CFO
believes the sales volume growth is too high. The company aims to
having an implied operating rate that does not exceed 80%. Given
that the sales growth rate is the same every year, what should that
rate be to make sure Chalten followsthe 80% rule?
(additional info) annual sales volume excel formula
=MIN(J49*(1+K11),K47)
A B C D 5 8 9 ASSUMPTIONS 11 13 14 15 16 17 18 20 21 23 25 26 28 30 31 32 34 37 38 39 40 41 42 43 44 46 47 49 51 Sales Volume Growth Cost Inflation SCENARIO SELECTOR: ECONOMIC SCENARIOS Best Case=Base Case +3% Worst Case=Base Case -3% Sales Price BASE CASE BEST CASE WORST CASE REVENUE ($ Millions) Pricing Gross Sales Price Freight & Warehousing Net Sales Price Sales Volume Annual Factory Capacity Annual Sales Volume Implied Operating Rate E (%) (%) F BASE CASE GHI J 2021A 4.0% 2.5% 2021A 3.0% -3.0% 2021A 100.0 450 302.8 67.3% K 2022 4.0% 2.5% 2022 3.0% -3.0% 790.0 790.0 813.7 766.3 2022 790.0 102.5 687.5 450.00 314.90 70.0% L 2023 4.0% 2.5% 2023 3.0% -3.0% 805.8 805.8 830.0 781.6 2023 805.8 105.1 700.7 450.00 327.49 72.8% M 2024 4.0% 2.5% Projected 2024 3.0% -3.0% 821.9 821.9 846.6 797.3 Projected 2024 821.9 107.7 714.2 450.00 340.59 75.7% N 2025 4.0% 2.5% 2025 3.0% -3.0% 838.4 838.4 863.5 813.2 2025 838.4 110.4 728.0 450.00 354.22 78.7% O 2026 4.0% 2.5% 2026 3.0% -3.0% 855.1 855.1 880.8 829.5 2026 855.1 113.1 742.0 450.00 368.38 81.9% PQ