# An investment had a nominal return of 11.1 percent last year. If the real return on the investment was only 7.3 percent, what was the inflation rate for the year

inflation rate= 3.8%

Explanation:

Giving the following information:

Nominal return= 11.1 percent

Real return= 7.3 percent

The real return on investments is the difference between the nominal return and the inflation rate.

Real return= nominal return - inflation rate

inflation rate= nominal return - real return

inflation rate= 11.1 - 7.3

inflation rate= 3.8%

The inflation rate is determined by subtracting the real return on an investment from its nominal return. In this case, the inflation rate is 3.8 percent.

### Explanation:

The inflation rate can be calculated by subtracting the real return from the nominal return. In this case, the nominal return is 11.1 percent and the real return is 7.3 percent.

To calculate the inflation rate, we use the formula: Inflation rate = Nominal return - Real return. So, the inflation rate would be: 11.1 - 7.3 = 3.8 percent.

This means that the value of money decreased by 3.8 percent over the course of the year due to inflation.

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## Related Questions

One unit of Maruna's currency (druba) was defined as equivalent to 16 grains of "fine" (pure) gold, while one unit of its neighbor, Rashumba's currency (troon) was defined as equivalent to 24 grains of "fine" (pure) gold. Using the gold par value concept (with 480 grains in an ounce), the exchange rate for converting the druba to the troon is__________

The exchange rate for converting the druba to the troon is1 troon = 1.5 druba.

### Explanation:

The amount in dollar that is obtained as the exchange rate in between two different currencies refers to the par value. This par value of currency depends on the exchange rates. Say for an instance, one British pound has the value of three U.S dollars and if an individual has 100 pounds, then  \$300 will be the par value in dollars.

The currency devaluations up to 10 percentage were allowed  under the Bretton Woods system. This can also be done only getting approvals form the International Monetary Funds. When considering gold,  the total amount of currency that is essential in purchasing one ounce of gold is known as gold par value. The exchange rate for converting the druba to the troon is 1 troon = 1.5 druba.

Your family runs a specialty ice cream parlor, Scoops. It manufactures its own ice cream in small batches and sells it only in pint-sized containers. After someone not affiliated with the company sent six pints of your ice cream to a popular talk-show host, she proclaimed on her national TV show that it was the best ice cream she had ever eaten. Immediately after the broadcast, orders came flooding in, overwhelming your small-batch production schedule and your limited distribution system. The company’s shipping manager thinks she can handle it, but you disagree. List the reasons why you need to restructure your channel of distribution.

Demand And Supply

Explanation:

Demand and supply are the biggest factors of buisness when demand becomes higher than supply it results in angry customers and unhappy reviews

The accounts receivable turnover is computed as __________ divided by __________. sales; accounts receivable sales; average accounts receivable sales; net income accounts receivable; net income

Accounts receivable turnover is computed by dividing sales revenue by average accounts receivable over a certain period. It gauges a company's effectiveness in extending credit and collecting debts. Higher values of this figure indicate a more proficient collections department and credit policy.

The accounts receivable turnover is a measure used in financial accounting to quantify a firm's effectiveness in extending credit and collecting debts. The formula to calculate this key figure involves the sales revenue divided by the average accounts receivable during a certain period. More specifically, it is computed as Net Credit Sales / Average Accounts Receivable. It's a key indicator of a company's short-term liquidity, with higher values indicating that the business has a more proficient collections department and credit policies.

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The Accounts Receivable Turnover is computed by dividing Sales by Average Accounts Receivable. It shows how quickly a firm collects on its credit sales.

### Explanation:

The Accounts Receivable Turnover is a measure used to quantify a firm's effectiveness in extending credit and collecting debts. It is computed by dividing Sales by Average Accounts Receivable. This formula indicates how quickly a company collects on its credit sales.An accrued expense best describes an amount not paid and currently matched with earnings. In business accounting, accrued expenses are those expenses that have been incurred, but not yet paid. These are calculated and recognized in the books, even if the payment hasn't been made. That is why they are also matched with earnings. An example might be wages for employees that have been earned but not yet paid out. Therefore, the correct answer is A. Not paid and currently matched with earnings.For example, if a company has total sales of \$100,000 and its average accounts receivable is \$20,000, the Accounts Receivable Turnover would be 5 (\$100,000 / \$20,000). This means the company collects its average receivable 5 times in a given year.

An accrued expense best describes an amount not paid and currently matched with earnings. In business accounting, accrued expenses are those expenses that have been incurred, but not yet paid. These are calculated and recognized in the books, even if the payment hasn't been made. That is why they are also matched with earnings. An example might be wages for employees that have been earned but not yet paid out. Therefore, the correct answer is A. Not paid and currently matched with earnings.

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Review the liabilities section of the balance sheet for Rings and Things. What problem can you identify with the payroll information, particularly as it relates to how much the one employee gets paid? What solution would you offer Janet and Omar?

The question asks to identify a problem in the liabilities section of a balance sheet, specifically in the payroll information, and suggest a solution. Possible issues could be inaccurate payroll calculations or inconsistencies between records. A possible solution could be auditing the payroll and implementing regular checks.

### Explanation:

The question asks you to review the liabilities section of the balance sheet for a company named Rings and Things with a focus on the payroll information. It's important to note that without specific details from the balance sheet and payroll information, a precise issue can't be identified. However, typical problems in this area could include inaccurate payroll calculations or discrepancies between the balance sheet and payroll records.

A solution to these issues could involve auditing the payroll procedures to identify and rectify any errors or inconsistencies. Furthermore, regular checks and audits could be implemented to prevent these types of issues from occurring in the future. It’s fundamental that Janet and Omar ensure all records are meticulous and accurate to maintain a healthy balance sheet.

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Explanation:

Most of the liability costs are coming from payroll, the individual salesperson. This employee only worked for 20 hours during April, and yet still makes an income of \$1000 dollars. This means they have an hourly rate of \$50 an hour, which is way more than the standard employee should be making. I would recommend Janet and Omar to decrease the hourly rate to something more standard, like minimum wage. This would decrease their liability costs by more than 50% because California's minimum wage rate is only about \$12-13.

Seasons Construction is constructing an office building under contract for Cannon Company and uses the percentage-of-completion method. The contract calls for progress billings and payments of \$1,550,000 each quarter. The total contract price is \$18,600,000 and Seasons estimates total costs of \$17,750,000. Seasons estimates that the building will take 3 years to complete, and commences construction on January 2, 2018. 18). Seasons Construction completes the remaining 25% of the building construction on December 31, 2020, as scheduled. At that time the total costs of construction are \$18,750,000.What is the total amount of Revenue from Long-Term Contracts and Construction Expenses that Seasons will recognize for the year ended December 31, 2020?

Revenue Expenses

(A) \$18,600,000 \$18,750,000

(B) \$4,650,000 \$ 4,687,500

(C) \$4,650,000 \$ 5,250,000

(D) \$4,687,500 \$ 4,687,500

(C) \$4,650,000 \$ 5,250,000

Explanation:

total contract price is \$ 18,600,000

season construction using percentage of completion method.

Amount of revenue & construction expense for the year ended december 31, 2020 will be

25% of \$ 18,600,000 revenue = \$ 4,650,000

25% of \$ 18,750,000 total cost = \$5,250,000

Young Pharmaceuticals is considering a drug project that costs \$2.42 million today and is expected to generate end-of-year annual cash flows of \$211,000 forever. At what discount rate would the company be indifferent between accepting or rejecting the project?

At 8.72% the company would be indifferent between accepting or rejecting the project

Explanation:

To be indifferent to accepting or rejecting the project, the initial cost of the project should equal the present value of all expected cash inflow to the project i.e. the Break-even point which is the point at which revenue = cost, thereby generating zero profit.

From the question, Young Pharmaceuticals is investing \$2.42 million and expects an annual year end cash flow of \$211,000 forever. We therefore apply the annuity to perpetuity formula

PV of perpetuity = Periodic cashflow/interest rate

cross multiply and make Interest the subject of the formular

= Interest = Periodic cashflow/PV of perpetuity

i = 211000/2420000

= 0.0872

= 8.72%