Which Is Better to Use for Multi-Year Projection Models — CAGR or AAGR? And How to Build in Scenarios in the Projections?
Businesses are often required to build Projection Models basis current / past performances to set expectations for the way forward. For such models, we typically use CAGRs (and not AAGRs).
But first — let us define the jargons:
CAGR stands for Compounded Annual Growth Rate and is, as the name suggests, the compounded rate of growth. CAGR formula is CAGR = (Ending Value / Beginning...
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