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

question 70

Multiple Choice

In its first year of operations,1999,the Gourmet Cheese Shoppe had earnings per share (EPS) of $0.26.Four years later,in 2003,EPS was up to $0.38,and 7 years after that,in 2010,EPS was up to $0.535.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:

Lump Sum Payment

A single payment made at a particular time, as opposed to multiple payments made over time.

Compounded Monthly

A financial term describing the process where interest earned is added to the principal each month, leading to increased interest in the next month.

Lump Sum Payment

A single payment made at a particular time, as opposed to several smaller installments.

Compounded Monthly

This is the process of calculating interest on both the initial principal and the accumulated interest from previous periods on a monthly basis.