Estimation of Many Percent Problems Can Be Done with Familiar

question 14

Multiple Choice

Estimation of many percent problems can be done with familiar numbers.Identify the idea that would not support estimation.

• A)Substitute a close percent that is easy to work with.
• B)Use a calculator to get an exact answer.
• C)Select numbers that are compatible with the percent to work with.
• D)Convert the problem to one that is simpler.

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Definitions:

Diluted Earnings

Earnings per share calculated by including the effects of all potential dilutive securities, which could decrease earnings per share by increasing the number of shares outstanding.

Potential Dilutive Effect

The possible impact on a company’s earnings per share if convertible securities were converted into common stock, often considered in financial analysis.

If-Converted Method

A calculation technique used to assess the impact on diluted earnings per share if all convertible securities were converted into common stock.

Convertible Securities

Financial instruments, such as bonds or preferred stocks, that can be converted into a predetermined number of common stock or equity shares.