Henry Purchased Stock in Nortel Networks for $120 Per Share

question 104

Multiple Choice

Henry purchased stock in Nortel Networks for $120 per share.Unfortunately the stock did not perform very well in the 3 years that Henry has owned it as it is now trading at $3.93 per share.Feeling that the value of the stock will only continue to drop,Henry sold his shares today.What annual rate of return did Henry make on his investment?

• A) -68%
• B) -66%
• C) -67%
• D) -69%
• E) -70%

Recognize the purpose and calculation method of the acid-test ratio.

Master the procedure for recording merchandise transactions under the perpetual inventory system.

Understand the logic behind inventory shrinkage entries and their implications.

Identify the documentations involved in merchandising transactions and their significance.

---

Definitions:

Debt Guarantees

Commitments made to cover the debt obligations of another party in case of payment default, typically provided by a parent company for its subsidiaries or a government for private enterprises.

Contingent Liability

A future financial liability that might occur based on the result of a particular event.

Contingent Liability

A potential financial obligation that may arise in the future, depending on the outcome of a specific event.

Future Event

A possible occurrence that may happen in the future, impacting strategies or decisions in various contexts.