An Investment Today of $25,000 Promises to Return $10,000 Annually

question 80

Multiple Choice

An investment today of $25,000 promises to return $10,000 annually for the next three years.What is the approximate real rate of return on this investment if inflation averages 6 percent annually during the period?

• A)3.5 percent
• B)9.7 percent
• C)14.0 percent
• D)20.0 percent

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Definitions:

Job Order Cost Accounting System

A method used in accounting to track the expenses and revenues of specific jobs or orders, allowing businesses to calculate the profitability of individual jobs.