Hugh Wallace Has the Following Information Regarding Three Investment Options

question 73

Multiple Choice

Hugh Wallace has the following information regarding three investment options. Each investment option involves the same one-year period. What nominal rate of return will Hugh earn if he invested in option 1?

• A) 0.79%
• B) 3.22%
• C) 0.32%
• D) 6.67%

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Definitions:

Unearned Revenue

Income received by a business for goods or services yet to be provided, often recorded as a liability on the balance sheet until the revenue is earned.

Accrued Revenue

Income that a company has earned but has not yet received payment for.

Depreciation

The methodical distribution of a physical asset's cost across its lifespan, mirroring its depreciation over time.

Supplies

Items and materials used in the daily operations of a business, often consumable and regularly replaced.