What Annual Rate of Return Is Earned on a $4,000

question 62

Multiple Choice

What annual rate of return is earned on a $4,000 investment made in year 2 when it grows to $8,000 by the end of year 8?

• A) 9.00 percent
• B) 12.00 percent
• C) 12.25 percent
• D) 50.00 percent

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Definitions:

Flexible Budget

A budget which is modifiable in response to changes in the volume of operations or activity levels.

Variable Cost Estimates

Predictions or calculations regarding the variable costs that will be incurred during a specific period.

Net Operating Income

A company's revenue minus its operating expenses, excluding taxes and interest, representing the profitability of its core business activities.

Tenant-Days

A metric used in real estate and hospitality to represent the total number of days that tenants or guests occupy a space in a given period.