A Data Storage Device That Cost $20

question 72

Multiple Choice

A data storage device that cost $20.25 was sold for $79.99. Calculate the rate of mark-up based on cost price.

• A) 74.68%
• B) 25.32%
• C) 395.01%
• D) 295.01%
• E) 75.32%

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Definitions:

Internal Rate Of Return

A metric used in capital budgeting to estimate the profitability of potential investments, calculated as the discount rate that makes the net present value of all cash flows from a particular project equal to zero.

Required Discount Rate

The minimum expected rate of return on an investment, used in the discounting process of present value calculations.

Profitability Index

A financial tool used to determine the desirability of an investment or project by dividing the present value of future cash flows by the initial investment cost.