Answer:
The times per period the average inventory balance is sold.
Explanation:
The formula for inventory turnover is as follows:
Where:
Average inventory = (beginning inventory+ ending inventory)/ 2
Considering the formula this makes the third option the only correct answer As it do not consider obsolote neither purchases for the period.
The real rate of return is 3.15%.
What is real rate of return?
The annual percentage of financial gain on an investment that has been prorated for inflation is known as the real rate of return. As a result, the real rate of return provides an accurate representation of the real purchasing power of the a given sum of money over time. The investor can calculate how much more of a nominal return seems to be real return by adjusting this same nominal return to account for inflation. Investors must account for the effects of additional factors, including such taxes and investing fees, in addition to adjusting for inflation, in order to calculate real returns on their investments or to make investment decisions. Subtracting this same nominal interest rate from the inflation rate yields the real rate of return.
1+real rate = (1+rate of return) / (1+inflation)
1 + real rate = (1+0.0645) / (1+0.032)
1 + Real Rate = 1.0315
Real Rate = 0.0315 = 3.15%
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Answer:
$5 per share
Explanation:
The formula and computation of the earning per share are shown below:
= (Net income - preference dividend) ÷ (Outstanding Number of shares)
= ($550,000 - $50,000) ÷ (100,000 shares)
= ($500,000) ÷ (100,000 shares)
= $5 per share
We do not consider the common stock dividend and the preference share outstanding because this is not relevant for the computation part.