Use the Information Below to Answer the Following Question(s)

question 85

Multiple Choice

Use the information below to answer the following question(s) .
Barry operates a shop in a resort in an area known for its high inflation rate. The inflation rate for the last few years has been averaging 3 percent a month. His long-term real rate of return is 12 percent, or 1 percent a month. On April 1 he anticipates that real dollar sales during the summer will be as follows:

-What will be the sales figures for years one and two, respectively, assuming the owner uses the nominal rate approach and there is no growth in sales?

• A) $880,000 and $968,000
• B) $904,000 and $1,021,520
• C) $824,000 and $848,720
• D) $906,400 and $1,026,951
• E) $906,400 and $1,113,920

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Definitions:

Judgment

A legal decision made by a court following a lawsuit.

Appeals

The process of seeking a higher court's review of a lower court's decision in hopes of overturning or modifying the decision.

Garnishment

A legal process used by a creditor to collect a debt by seizing property of the debtor (such as wages) that is being held by a third party (such as the debtor’s employer).

Domesticated

In legal terms, this involves the process by which a foreign judgment or legal decision is recognized and can be enforced within the jurisdiction of another country or state.