Estimations Calculated Using the Rule of 70

question 71

Multiple Choice

Estimations calculated using the rule of 70:

• A) make it easier to appreciate how small differences in growth rates can add up to huge differences in income over time.
• B) make it easier to appreciate how big differences in growth rates are needed to create any real difference in income over time.
• C) are simple to use, but make it difficult to see the relationship between growth rate and income over time.
• D) are simple to use, but give estimates that have been proven wrong in recent decades.

---

Definitions:

Marketplace

A platform or environment where buyers and sellers engage in exchange of goods and services. It can be physical or digital.

Target Cost

A pricing strategy in which a company sets a cost for a product and works backwards to achieve that cost through design and manufacturing improvements.

Profit Margin

The ratio of operating income to sales.

Markup Percentage

The percentage added to the cost of goods to cover overhead and profit, determining the selling price.