Internal Growth Rate: Mercantile Company Has Net Income of $3,413,500

question 3

Multiple Choice

Internal growth rate: Mercantile Company has net income of $3,413,500 on assets of $16,109,445 and retains 55 percent of its income every year. What is the company's internal growth rate?

• A) 21.2%
• B) 8.6%
• C) 11.7%
• D) 9.4%

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Definitions:

Subtract

The mathematical process of deducting one number from another.

Correlated

Implies a statistical relationship where two variables move together in some predictable pattern.

Error Terms

Components of a statistical model that represent the difference between observed and predicted values.

Time

The ongoing and continuous sequence of events that occur in succession, from the past through the present to the future.