For Which Growth Rate Would the Rule of 70 Be

question 263

Multiple Choice

For which growth rate would the Rule of 70 be LEAST accurate?

• A) 1%
• B) 15%
• C) 20%
• D) 30%

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Definitions:

Implicit Interest Rate

An interest rate inferred from leasing transactions or other contractual arrangements, calculated based on the present value of payments and the initial value of the leased asset.

Present Value Factors

A mathematical formula used to determine the present value of a series of future cash flows by applying a specific discount rate.

Capital Lease

A lease classified as a purchase by the lessee for accounting purposes, where the lessee essentially buys the leased asset.