Suppose Hypothetically That the Consumer Price Index (CPI) Was 150

question 119

Multiple Choice

Suppose hypothetically that the consumer price index (CPI) was 150 in Year 1 and was 180 in Year 2. What would be the inflation rate for this period?

• A) 12 percent.
• B) 16.7 percent.
• C) 20 percent.
• D) 30 percent.

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Definitions:

Accounts Payable Period

The average time it takes for a company to pay off its suppliers.

Credit Sales

Transactions in which goods or services are provided to a customer with the agreement that payment will be made at a later date.

COGS

Stands for Cost of Goods Sold, which represents the direct costs attributable to the production of the goods sold by a company, including materials and labor.

Cash Cycle

The cash cycle measures the time it takes for a company to convert its inventory and other resources into cash flows from sales, indicating the efficiency of a company's cash management.