An Asset Had a Real Return of 12

question 42

Multiple Choice

An asset had a real return of 12.6 percent and a nominal return of 15.3 percent. What was the approximate inflation rate for the year?

• A) 2.7%
• B) 27.9%
• C) 13.2%
• D) 3.9%
• E) 4.6%

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Definitions:

Net Sales

The amount of sales revenue remaining after deducting returns, allowances for damaged or missing goods, and discounts.

Accounts Receivable

Funds that customers owe to a business for products or services that have been received but remain unpaid.

Bad Debt Expense

The cost associated with accounts receivable that a company is unable to collect.

Allowance for Doubtful Accounts

A contra-asset account used to estimate the portion of receivables that may not be collected.