Using the Rule of 72, Calculate the Average Annual Growth

question 37

Multiple Choice

Using the rule of 72, calculate the average annual growth rate of GDP needed for a country to double its size in just four years?

• A)12 percent
• B)4 percent
• C)18 percent
• D)72 percent
• E)28 percent

---

Definitions:

Capital Structure

The mix of a company's long-term debt, specific short-term debt, common equity, and preferred equity, which is used to finance its overall operations and growth.

ROE

Return on Equity, measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested.

Statement of Cash Flows

A financial statement that shows how changes in balance sheet accounts and income affect cash and cash equivalents, dividing activities into operating, investing, and financing activities.

Cash Flow

Cash flow refers to the net amount of cash and cash-equivalents being transferred into and out of a business, illustrating the company's financial health and operational efficiency.