document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1176778>Question 1176778</A>: <I><SPAN STYLE=\"word-break: break-all;\"> In 2014 (when the CPI was 236.7) Walmart's annual revenue was $486 billion. By 2015, Walmart's annual report boasted that revenue had grown to $500 billion (and CPI rose to 245.1). The base year of the CPI is 2012.\r<BR>\n" );
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document.write( "Answer the following questions based on the above information.  Show work for partial credit.\r<BR>\n" );
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document.write( "a. What was Walmart's revenue in 2014 adjusted for inflation?\r<BR>\n" );
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document.write( "b. What was Walmart's revenue in 2015 adjusted for inflation?\r<BR>\n" );
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document.write( "c. Did Walmart's nominal revenue increase or decrease from 2014 to 2015?\r<BR>\n" );
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document.write( "d. Did Walmart's real revenue increase or decrease from 2014 to 2015?\r<BR>\n" );
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document.write( "e. If you worked for Walmart, would you rewrite the annual report?  why or why not </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #850564 by </B><A HREF=/tutors/aboutme.mpl?userid=CPhill><B>CPhill(1959)</B></A><img src=\"/images/stars/stars-12.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=CPhill><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/cgi-bin/show-face.mpl?user=CPhill><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=850564\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> Let's break down this problem step-by-step.\r<BR>\n" );
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document.write( "**Given Information:**\r<BR>\n" );
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document.write( "* **2014:**<BR>\n" );
document.write( "    * CPI: 236.7<BR>\n" );
document.write( "    * Nominal Revenue: $486 billion<BR>\n" );
document.write( "* **2015:**<BR>\n" );
document.write( "    * CPI: 245.1<BR>\n" );
document.write( "    * Nominal Revenue: $500 billion<BR>\n" );
document.write( "* Base Year: 2012\r<BR>\n" );
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document.write( "**a. What was Walmart's revenue in 2014 adjusted for inflation?**\r<BR>\n" );
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document.write( "To find the real revenue (adjusted for inflation), we use the following formula:\r<BR>\n" );
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document.write( "* Real Revenue = (Nominal Revenue / CPI) * 100\r<BR>\n" );
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document.write( "* Real Revenue (2014) = ($486 billion / 236.7) * 100<BR>\n" );
document.write( "* Real Revenue (2014) ≈ $205.32 billion\r<BR>\n" );
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document.write( "**b. What was Walmart's revenue in 2015 adjusted for inflation?**\r<BR>\n" );
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document.write( "* Real Revenue (2015) = ($500 billion / 245.1) * 100<BR>\n" );
document.write( "* Real Revenue (2015) ≈ $204.00 billion\r<BR>\n" );
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document.write( "**c. Did Walmart's nominal revenue increase or decrease from 2014 to 2015?**\r<BR>\n" );
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document.write( "* Nominal Revenue (2014): $486 billion<BR>\n" );
document.write( "* Nominal Revenue (2015): $500 billion\r<BR>\n" );
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document.write( "* The nominal revenue increased from $486 billion to $500 billion.\r<BR>\n" );
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document.write( "**d. Did Walmart's real revenue increase or decrease from 2014 to 2015?**\r<BR>\n" );
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document.write( "* Real Revenue (2014): $205.32 billion<BR>\n" );
document.write( "* Real Revenue (2015): $204.00 billion\r<BR>\n" );
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document.write( "* The real revenue decreased from $205.32 billion to $204.00 billion.\r<BR>\n" );
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document.write( "**e. If you worked for Walmart, would you rewrite the annual report? why or why not?**\r<BR>\n" );
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document.write( "Yes, I would rewrite the annual report to provide a more accurate and nuanced picture of Walmart's performance. Here's why:\r<BR>\n" );
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document.write( "* **Misleading Headline:** Simply stating that revenue \"grew\" is misleading. While nominal revenue increased, real revenue (which reflects actual purchasing power) decreased. This could give investors a false impression of growth.<BR>\n" );
document.write( "* **Transparency:** A responsible annual report should present both nominal and real revenue figures. This allows stakeholders to understand the impact of inflation on the company's performance.<BR>\n" );
document.write( "* **Context:** Explaining the difference between nominal and real values is crucial. The report should clarify that the nominal increase was partially offset by inflation.<BR>\n" );
document.write( "* **Improved Wording:** Instead of just saying \"revenue had grown,\" the report could say something like: \"Nominal revenue increased to $500 billion. However, after adjusting for inflation, real revenue was $204.00 billion, slightly lower than the previous year.\" or \"While nominal revenue increased, real revenue decreased slightly.\"\r<BR>\n" );
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document.write( "By providing a more comprehensive and transparent analysis, Walmart can build trust with its stakeholders and provide a more accurate representation of its financial performance.<BR>\n" );
document.write( " </SPAN>\n" );
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