Assume You Purchased a Rental Property for $100,000 and Sold

question 76

Multiple Choice

Assume you purchased a rental property for $100,000 and sold it one year later for $115,000 (there was no mortgage on the property) .At the time of the sale,you paid $3,000 in commissions and $1,000 in taxes.If you received $10,000 in rental income (all received at the end of the year) ,what annual rate of return did you earn?

• A) 6%
• B) 11%
• C) 20%
• D) 25%

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Definitions:

Ending Inventory

is the value of goods available for sale at the end of an accounting period, calculated by adding new purchases to the starting inventory, then subtracting the cost of goods sold.

Budgeted Sales

Projected or planned sales for a future period, often used for planning and financial forecasting.

Master Budget

A comprehensive financial plan for an organization, including all individual budgets related to sales, production, overheads, etc., for a specific period.

Direct Labor

The wages and salaries for the workers who are directly involved in the production of goods, easily traceable to the product.