Reference no: EM133129140

Evelyn's current project is to forecast the next five year's revenue for her firm's consulting practice. Over the past three years, the firm has raised hourly prices a total of 25% and the number of hours it has sold, after adjusting for non-price factors, has gone down 15%. She expects this relationship of price and demand to hold true over the next 5 years. This year, the firm will sell 10,000 hours at an average of $150 per hour. She has decided to base her forecast on raising the hourly rate 8% in each of the next five years. In addition, she plans to raise the marketing budget enough so that the firm will sell 250 more hours each year than it would achieve without this incremental marketing budget increase. With these assumptions, the firm's revenue in year 5 will be what?

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