TABLE 3-5 The Rate of Return of a Fortune 500 Company Over

question 45

Short Answer

TABLE 3-5
The rate of return of a Fortune 500 company over the past 15 years are: 3.17%, 4.43%, 5.93%, 5.43%, 7.29%, 8.21%, 6.23%, 5.23%, 4.34%, 6.68%, 7.14%, -5.56%, -5.23%, -5.73%, -10.34%
-Referring to Table 3-5, compute the geometric mean rate of return for the first four years.

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Definitions:

Non-regenerative Resources

Resources that cannot be replenished or renewed after their consumption, such as fossil fuels and minerals.

Full Cost Method

An accounting method used in the oil and gas industry, where all exploration, development, and production expenses are capitalized rather than expensed.

Successful Efforts Method

An accounting approach used in the oil and gas industry where costs are capitalized only if successful in finding hydrocarbons.