The Consumer Price Index Was 247 in Year 1 and 272

question 120

Multiple Choice

The consumer price index was 247 in year 1 and 272 in year 2.The rate of inflation in year 2 was about:

• A)12 percent.
• B)10 percent.
• C)8 percent.
• D)6 percent.

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Definitions:

Net Present Value

A method used in capital budgeting to evaluate the profitability of an investment by calculating the difference between the present value of cash inflows and outflows over a period of time.

Working Capital

The difference between a company's current assets and its current liabilities, indicating the liquidity and operational efficiency of the business.

Salvage Value

The forecasted value at which an asset can be resold once it's no longer useful.

Cash Inflows

The total amount of money being transferred into a company, typically from operational, investment, and financing activities.