Having trouble in understanding a question statement
Hello everybody, I'm newcomer in the finance world and also a student. I was given an assignment in which there's a question about calculating 5 year cash flow and create a balance sheet of a company. In the question it's mentioned that the raw material cost per unit is 55% of the sales price per unit increasing 7% annually. I'm just confused by the question that what it actually means. So far, I've come to a point that it means first year 55% and then for second year I've to calculate 55%+(55*0.07)% of the unit sales price. Is this the correct approach or am I doing it wrong? Please help.....
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