Business – 3.2 Market research – Purposes | e-Consult
3.2 Market research – Purposes (1 questions)
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Answer: CAGR is calculated using the formula:
| CAGR = [(Ending Value / Beginning Value)^(1/Number of Years)] – 1 |
Applying the figures:
| Ending Value = £65 million |
| Beginning Value = £50 million |
| Number of Years = 3 |
Calculation:
- £65 m / £50 m = 1.30
- 1.30^(1/3) ≈ 1.091
- 1.091 – 1 = 0.091, or 9.1% per annum
The market’s CAGR of approximately 9 % per year would generally be regarded as moderate to strong growth for a mature market, where double‑digit growth is uncommon.