A Sales Growth Rate Based on the Retention of Profits

question 14

Multiple Choice

A sales growth rate based on the retention of profits is referred to as the:

• A) real sales growth rate
• B) sustainable sales growth rate
• C) spontaneous sales growth rate
• D) nominal sales growth rate
• E) weighted average sales growth rate

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Definitions:

Financial Asset

An asset that derives value from a contractual claim, such as cash, ownership interest in an enterprise, a bond, stock, or right to receive cash from a contract.

Accounts Receivable

Money owed by customers to a company for goods or services that have been delivered or used but not yet paid for.

Forward Exchange Contracts

Financial derivatives that lock in an exchange rate today for the purchase or sale of a currency on a future date.

Financial Instruments

Deals that create a financial asset for one entity and simultaneously generate either a financial liability or an equity instrument for another entity.