Use the Following to Answer Questions

question 157

Multiple Choice

Use the following to answer questions:
-(Table: Peanut Butter and Jelly) Use Table: Peanut Butter and Jelly.Suppose a market basket consists of 20 jars of peanut butter and 10 jars of jelly.If 2012 is the base year,what is the rate of inflation between 2013 and 2014?

• A) 4.9%
• B) 11.25%
• C) 22.5%
• D) 10.1%

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Definitions:

Internal Rate

Often refers to the internal rate of return (IRR), a metric used in capital budgeting to estimate the profitability of potential investments.

Cash Inflows

The total amount of money being transferred into a business, usually from operating, investing, and financing activities.

Discount Rate

The rate applied within discounted cash flow analysis for assessing the present worth of forthcoming cash flows.

Net Present Value

A method of evaluating investments by calculating the difference between the present value of cash inflows and the present value of cash outflows over a period of time.