In Its First Year of Operations, 1999, the Gourmet Cheese

question 24

Multiple Choice

In its first year of operations, 1999, the Gourmet Cheese Shoppe had earnings per share (EPS) of R0.26.Four years later, in 2003, EPS was up to R0.38, and 7 years after that, in 2010, EPS was up to R0.535.It appears that the first 4 years represented a supernormal growth situation and since then a more normal growth rate has been sustained.What are the rates of growth for the earlier period and for the later period?

• A) 6%; 5%
• B) 6%; 3%
• C) 10%; 8%
• D) 10%; 5%
• E) 12%; 7%

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Definitions:

Rescission

A remedy whereby a contract is canceled and the parties are returned to the positions they occupied before the contract was made; may be effected through the mutual consent of the parties, by their conduct, or by court decree.

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