Tropical Tans Is Saving Money to Build a New Salon

question 228

Multiple Choice

Tropical Tans is saving money to build a new salon. Three years ago, they set aside $12,000 for this purpose. Today, that account is worth $16,418. What rate of interest is Tropical Tans earning on this
Money?

• A) 10.88%
• B) 10.97%
• C) 11.01%
• D) 11.14%
• E) 11.23%

---

Definitions:

Cash Collections

The process of receiving cash payments from customers, typically for goods sold or services rendered.

Finished Goods Inventory

This refers to the value of goods in a company's inventory that are completed and ready for sale.

Merchandise Inventories

Goods that a company holds for the purpose of sale in the ordinary course of business, including finished products, work in progress, and raw materials.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including material and labor expenses.