Calculate the Economic Rate of Return in Years 1, 2

question 31

Multiple Choice

Calculate the economic rate of return in years 1, 2 and 3.

• A) 43.3%, 43.3%, 65%
• B) 10%, 10%, 10%
• C) 43.3%, 40%, 36.7%
• D) None of the above

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Definitions:

Ending Inventory

The worth of products ready for purchase at an accounting period's close, determined by adding the initial inventory to acquisitions and subtracting the cost of goods sold.

Unit Sales

The quantity of items sold by a company, not taking into account any returns or cancellations.

Units

A measure of quantity or amount in business, such as items produced, sold, or in inventory.

Production Budget

An estimate of the total units that need to be produced in a period to meet expected sales demands and inventory levels.