The Nominal Interest Rate Is 4%,the Inflation Rate Is 1

question 65

Multiple Choice

The nominal interest rate is 4%,the inflation rate is 1% and the tax rate is 20%.Given U.S.tax laws,how is after-tax real return computed?

• A).03(1-.20)
• B).04(1 -.20)
• C).04(1 - .20)- .01
• D)None of the above is correct.

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Definitions:

Beginning Work

The initial stage or tasks that start a process, often referring to the beginning inventory or work-in-process in manufacturing.

Costs Added

Expenses that have been incurred additionally, often related to production or acquisition of inventory.

Weighted-Average

A calculation method that multiplies each component by a weight reflecting its importance and sums these products to get an average.

Equivalent Units

A concept used in cost accounting to express the amount of work done on partially finished goods in terms of fully finished goods.