The federal government doesn't have a capital budget; however, private enterprises do have a capital budget and when they invest in productive assets such as machinery it is recorded in their capital budget as an asset. What is one of the explanations why the federal government's investments are not discussed in relation to a capital budget and recorded as an asset like a private enterprise's investments are

Answer: Debt service funds are required to report accrued interest payable.

Explanation:

The modified accrual basis of accounting is utilized for governmental funds. It should also be noted that permanent funds reflect resources that are legally restricted so that principal may not be expended and earnings are used to benefit the government or its citizenry.

Therefore, the option that debt service funds are required to report accrued interest payable is not true.

Answer:

146,000 units

Explanation:

The computation of units must the company produce is shown below:-

As we know that

Units sold = opening inventory + units produced - Closing inventory

So,

Units Produced = Units sold - opening inventory + Closing inventory

= 140,000 - 34,000 + 40,000

= 146,000 units

Hence, the number of units produced by the company is 146,000 units

Answer:

$18,191,268.19

Explanation:

the company's WACC = (weight of equity x Re) + (weight of debt x after tax cost of debt) = (0.6 x 11.5%) + (0.4 x 4.3%) = 6.9% + 1.72% = 8.62%

discount rate adjustment factor = 8.62% + 3% = 11.62%

to determine the value of the project:

$1,750,000 / (11.62% - 2%) = $1,750,000 / 9.62% = $18,191,268.19

If the initial outlay is $18,191,268.19, then the project's NPV = $0. This is the maximum amount that the firm should be willing to invest in this project.

Answer: False

Explanation:

Flotation costs are the costs that are incurred by a company whenever the company is issuing new securities. They are fee that are charged by the financial institutions for services such as legal and underwriting services.

Flotation costs are additional costs associated that are incurred when a new common stock is raised.

Answer:

$10,000

Explanation:

Most of the time the Administrator requires a posting of a $10,000 surety bond to be registered as a broker-dealer, due to the Uniform Securities act but each separate state administrator can change this amount to what they seem fit. A surety bond makes sure that the individual assumes responsibility for that amount of debt obligation if the borrower defaults on the payment.

Answer:

A. a multinational company

Answer:

c.  Noise

Explanation:

-Feedback is the answer given by the receiver.

-Decoding is the process in which the receiver interprets the message.

-Noise is any interference that affects the communication process.

-Encoding is when the sender translates his/her thoughts into a message.

-Channel is the method used to send the message.

According to these definitions, the answer is that noise refers to difficulties in the communication process  that might arise due to some type of interference or distortion that occurs during transmission of a message, resulting in disruption of the communication process.

Noise refers to difficulties in the communication process that might arise due to some type of interference or distortion that occurs during transmission of a message, resulting in disruption of the communication process.

There are different types of noise. They include physical, semantic, psychological, and physiological.

Each of the above types interferes with the process of communication in different ways.

Noise is also regarded as obstruction to the process of coding and decoding information.

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Answer:

77,500 units

Explanation:

Projected sales = 78,000 machines

Opening inventory = 6,500 units

Closing inventory = 6,000 units

We will use the formulae below to calculate Budgeted production in unit.

Closing inventory = Opening inventory + Production - Sales

6,000 = 6,500 + Production - 78,000

Production = 6,000 - 6,500 + 78,000

= 77,500 units.

Therefore, Budgeted production is 77,500 units

Answer:

Internal rate of return

Explanation:

The internal rate of return is that return in which the net present value equivalent to zero

i.e.

Net present value = 0

That means

Initial investment = Present value of cash inflows after charging the discounting factor like 10% 12% etc

So as per the given situation, the internal rate of return is the correct answer

Answer:

b) directing

Explanation:

The four main management functions are:

Originally, there were 5 main management functions developed by Henri Fayol (staffing was the fifth one) in the early 20th century. Fayol's management theory is still applied today, although it has been modified and updated.

Answer:

b. Philip Adams, by Alice Jackson, his attorney in fact

Explanation:

A power of attorney is the legal document in which it allows someone to act on behalf of you. In this, the person has the authority to act on behalf of the other person with respect to the legal, financial matters, etc

Here the proper way to sign is the option B

Philip Adams, by Alice Jackson, his attorney in fact

Therefore all the other options are wrong

Answer:

The value of the firm's stock is $703,920

The price is $5.63 per share ($703,920/125,000 shares)

Explanation:

a) Data and Calculations:

Free cash flows = $200,000

Present value of the free cash flows = $200,000 x Annuity Factor, for 5 years at cost of capital of 15% x (1 + growth rate)

= $200,000 x 3.352 x 1.05

= $703,920

Therefore, common equity = $703,920

To calculate Company XYZ's free cash flows in their present value, they are discounted, using the present value table.  The resulting amount is equivalent to the value of the common stock.  The company's free cash flow is the amount that is left after settling operating expenses and capital expenditure.

Answer:

24.82%

Explanation:

Arithmetic average = sum of observations / number of observations

Let x = the stock return for year 5

12.71 % = (15.51% + 22.47%  −8.68% + 9.43 + x) /5

Multiply both sides by 5

63.55% =  (5.51% + 22.47%  −8.68% + 9.43 + x)

63.55% = 38.73% + x

x =  63.55% - 38.73% = 24.82%

Answer:

1. Actual Quantity = 1,850 pounds

Actual materials cost = $4,070

Standard rate per pound = $2

Standard Quantity = 6 pounds per unit * 300 units

Standard Quantity = 1,800

Standard materials cost = Standard Quantity * Standard rate per pound

Standard materials cost = 1,800 * $2

Standard materials cost = $3,600

1a. Total Materials Variance = Actual materials cost - Standard materials cost

Total Materials Variance = $4,070 - $3,600

Total Materials Variance = $470 Unfavorable

1b. Materials Price Variance = Actual materials cost - Actual Quantity * Standard rate per pound

Materials Price Variance = $4,070 - 1,850 * $2

Materials Price Variance = $370 Unfavorable

1c. Materials Quantity Variance = Standard rate per pound * (Actual Quantity - Standard Quantity)

Materials Quantity Variance = $2.00 * (1,850 - 1,800)

Materials Quantity Variance = $100 Unfavorable

2. Actual labor hours = 620

Actual labor cost = $7,130

Standard rate per hour = $12

Standard labor hours = 2 hours per unit * 300 units

Standard labor hours = 600

Standard labor cost = Standard labor hours * Standard rate per hour

Standard labor cost = 600 * $12

Standard labor cost = $7,200

2a. Total Labor Variance = Actual Labor cost - Standard Labor cost

Total Labor Variance = $7,130 - $7,200

Total Labor Variance = $70 Favorable

2b. Labor Price Variance = Actual Labor cost - Actual labor hours * Standard rate per hour

Labor Price Variance = $7,130 - 620 * $12

Labor Price Variance = $310 Favorable

2c. Labor Quantity Variance = Standard rate per hour * (Actual labor hours - Standard labor hours)

Labor Quantity Variance = $12.00 * (620 - 600)

Labor Quantity Variance = $240 Unfavorable

Answer:

The bond's market price will decrease by $72.08 (1.83%) from $3,928.89 to $3,856.81.

Explanation:

bond's current market price:

$5,000 / (1 + 4.45%)¹⁶ = $2,491.35

$127.50 x 11.27483 (PV annuity factor, 4.45%, 16 periods) = $1,437.54

current market price = $3,928.89

if interests rise and YTM increases to 9.2%, then new market price:

$5,000 / (1 + 4.6%)¹⁶ = $2,434.80

$127.50 x 11.15305 (PV annuity factor, 4.45%, 16 periods) = $1,422.01

current market price = $3,856.81

Answer

a) $15

Explanation:

We will use the formula for Total labor variance to arrive at Standard rate.

Total labor variance = (Actual hours × Actual rate) - (Standard hours × Standard rate)

Substituting the data above into the formula, we'll have;

-$23,000 = (4,000 × $13) - (5,000 × SR)

-$23,000 = $52,000 - 5,000SR

Collect like terms

5,000SR = $52,000 + $23,000

5,000SR = $75,000

SR = $75,000 / 5,000

SR = $15

Answer:

a. Standard cost = Total estimated cost of material ÷ Estimated production

= $1,400,000 / 500,000 unit

= $2.80 per unit

Thus, the standard cost of material is $2.80, and the budgeted cost is $1,400,000.

b. Standard cost = Total estimated cost of labor / Estimated production

= $1,700,000 / 500,000

= $3.40  per unit

Thus, standard cost of labor is $3.40 and budgeted cost is $1,700,000.

Answer: I rehearse repeatedly and practice stress reduction techniques

Explanation:

The best response that the speaker can give will be that "rehearse repeatedly and practice stress reduction techniques".

By rehearsing repeatedly and practice stress reduction techniques, one will be at ease and comfortable in front of a large audience.

Answer:

Real GDP

Explanation:

Nominal GDP less percent change in price levels equals to real GDP

Nominal GDP is GDP calculated using current year prices

Real GDP is GDP using base year prices. it has been adjusted for inflation.

Gross domestic product is the total sum of final goods and services produced in an economy within a given period which is usually a year

Answer:

Mar. 31

Dr Finished Goods Inventory 70,200

Cr Work in Process 70,200

Mar. 31

Dr Cash 40,300

Cr Sales 40,300

Mar. 31

Dr Cost of Goods Sold 29,900

Cr Finish Goods in Inventory 29,900

Explanation:

Preparation of the Journal entries for the completion of the two jobs and the sale of Job 10

1.Based on the information given we were told that Job 10 cost the amount of $29,900 while Job 11 cost the amount of $40,300 , this means that the Journal entry will be:

Mar. 31

Dr Finished Goods Inventory 70,200

Cr Work in Process 70,200

($29,900 + 40,300)

(To record completion of jobs.)

2. Based on the information given we were told that On March 31, Job 10 was sold to the customer for the amount of $40,300 in cash, this means that the Journal entry will be

Mar. 31

Dr Cash 40,300

Cr Sales 40,300

(To record sale of job.)

3. Based on the information given we were told that the sales of Job 10 cost the amount of $29,900, this means that the transaction will be recorded as:

Mar. 31

Dr Cost of Goods Sold 29,900

Cr Finish Goods in Inventory 29,900

(To record cost of job.)

Answer:

$26.5

Explanation:

the question says that the bond has a face value equal to 1000 dollars

coupon rate = 5.3%

and that the bond pays semiannually. semiannually means that it pays after 6 months.

semi annual coupon payment formula is given by = coupon rate/2 multiplied by face value

= 5.3%/2 multiplied by 1000

= 0.0265 x 1000

= $26.5

therefore from this calculation, the coupon payment on the bond is $26.5 dollars in every six months or semiannually.

Answer:

NELSON COMPANY

A. Current Ratio = Current Assets/Current Liabilities

= $38,500/$13,000

= 2.96 : 1

B. Acid-test Ratio = Current Assets - Inventory/Current Liabilities

= $24,600/$13,000

= 1.89 : 1

C. Gross margin ratio = Gross margin/Net Sales x 100

= $70,750/$110,950 x 100

= 63.77%

Explanation:

a) Data and Calculations:

NELSON COMPANY

1. Unadjusted Trial Balance  as of January 31, 2013

                                                       Debit     Credit

Cash                                          $ 24,600

Merchandise inventory                12,500

Store supplies                               5,900

Prepaid insurance                         2,300

Store equipment                        42,900

Accumulated depreciation—

    Store equipment                                  $ 19,950

Accounts payable                                         13,000

J. Nelson, Capital                                        39,000

J. Nelson, Withdrawals                2,100

Sales                                                            115,200

Sales discounts                          2,000

Sales returns and allowances   2,250

Cost of goods sold                  38,000

Depreciation expense—

      Store equipment              0

Salaries expense                     31,300

Insurance expense                 0

Rent expense                         14,000

Store supplies expense         0

Advertising expense              9,300

Totals                                $ 187,150       $ 187,150

2. Adjusted Trial Balance as of January 31, 2013

                                                       Debit     Credit

Cash                                          $ 24,600

Merchandise inventory                10,300

Store supplies                                2,800

Prepaid insurance                             800

Store equipment                         42,900

Accumulated depreciation—

    Store equipment                                  $ 21,625

Accounts payable                                         13,000

J. Nelson, Capital                                        39,000

J. Nelson, Withdrawals                2,100

Sales                                                            115,200

Sales discounts                          2,000

Sales returns and allowances   2,250

Cost of goods sold                  40,200

Depreciation expense—

      Store equipment                 1,675

Salaries expense                     31,300

Insurance expense                   1,500

Rent expense                         14,000

Store supplies expense           3,100

Advertising expense               9,300

Totals                               $ 188,825      $ 188,825

3. NELSON COMPANY

Income Statement for the year ended January 31, 2013:

Sales Revenue                                     $110,950

Cost of goods sold                                40,200

Gross profit                                          $70,750

Depreciation expense—

      Store equipment                 1,675

Salaries expense                     31,300

Insurance expense                   1,500

Rent expense                         14,000

Store supplies expense           3,100

Advertising expense               9,300    60,875  

Net Income                                         $ 9,875

4. Sales Revenue                    $115,200

   Sales discount & allowances (4,250)

  Net Sales Revenue             $110,950

5. NELSON COMPANY

Balance Sheet as of January 31, 2013:

Assets:

Cash                                                         $ 24,600

Merchandise inventory                               10,300

Store supplies                                               2,800

Prepaid insurance                                            800

Current Assets:                                           38,500

Store equipment                         42,900

Accumulated depreciation—

    Store equipment                   (21,625)     21,275

Total Assets                                             $ 59,775

Liabilities + Equity:

Accounts payable                                       $13,000

J. Nelson, Capital                                         39,000

J. Nelson, Withdrawals                                 (2,100 )

Net Income                                                 $ 9,875

Total Liabilities + Equity                         $ 59,775

a) Nelson Company's current ratio is the measure of the company's ability to settle maturing short-term liabilities with short-term financial resources.  It is is measured as the relationship between current assets and current liabilities.

b) Nelson's acid-test ratio takes away the encumbrances that can slow the conversion of current assets into cash for the settlement of current liabilities.  In this case, the inventory, stores supplies, and prepaid insurance are excluded.

c) Nelson has a robust gross margin ratio of more than 60%.  This means that it is able to limit the cost of goods sold to below 40%.  However, management of Nelson Company is unable to control its periodic costs in order to generate reasonable net income, as it can only turn less than 9% of the sales into returns for J. Nelson.

According to the NELSON COMPANY

A. The Current Ratio = Current Assets/Current Liabilities

Then = $38,500/$13,000

now = 2.96 : 1

B. After that Acid-test Ratio = Current Assets - Inventory/Current Liabilities

Then = $24,600/$13,000

Now = 1.89 : 1

C. When the Gross margin ratio = Gross margin/Net Sales x 100

Then = $70,750/$110,950 x 100

Now = 63.77%

1. when Unadjusted Trial Balance  as of January 31, 2013

                                                      Debit     Credit

Cash                                          $ 24,600

Merchandise inventory                12,500

Store supplies                               5,900

Prepaid insurance                         2,300

Store equipment                        42,900

Accumulated depreciation—

   Store equipment                                  $ 19,950

Accounts payable                                         13,000

J. Nelson, Capital                                        39,000

J. Nelson, Withdrawals                2,100

Sales                                                            115,200

Sales discounts                          2,000

Sales returns and allowances   2,250

Cost of goods sold                  38,000

Depreciation expense—

     Store equipment              0

Salaries expense                     31,300

Insurance expense                 0

Rent expense                         14,000

Store supplies expense         0

Advertising expense              9,300

Totals                                $ 187,150       $ 187,150

2. when Adjusted Trial Balance as of January 31, 2013

                                                      Debit     Credit

Cash                                          $ 24,600

Merchandise inventory                10,300

Store supplies                                2,800

Prepaid insurance                             800

Store equipment                         42,900

Accumulated depreciation—

   Store equipment                                  $ 21,625

Accounts payable                                         13,000

J. Nelson, Capital                                        39,000

J. Nelson, Withdrawals                2,100

Sales                                                            115,200

Sales discounts                          2,000

Sales returns and allowances   2,250

Cost of goods sold                  40,200

Depreciation expense—

     Store equipment                 1,675

Salaries expense                     31,300

Insurance expense                   1,500

Rent expense                         14,000

Store supplies expense           3,100

Advertising expense               9,300

Totals                               $ 188,825      $ 188,825

3. NELSON COMPANY

Income Statement for the year ended January 31, 2013:

Sales Revenue                                     $110,950

Cost of goods sold                                40,200

Gross profit                                          $70,750

Depreciation expense—

     Store equipment                 1,675

Salaries expense                     31,300

Insurance expense                   1,500

Rent expense                         14,000

Store supplies expense           3,100

Advertising expense               9,300    60,875  

Net Income                                         $ 9,875

4. Sales Revenue                    $115,200

  Sales discount & allowances (4,250)

 Net Sales Revenue             $110,950

5. NELSON COMPANY

Balance Sheet as of January 31, 2013:

Assets:

Cash                                                         $ 24,600

Merchandise inventory                               10,300

Store supplies                                               2,800

Prepaid insurance                                            800

Current Assets:                                           38,500

Store equipment                         42,900

Accumulated depreciation—

   Store equipment                   (21,625)     21,275

Total Assets                                             $ 59,775

Liabilities + Equity:

Accounts payable                                       $13,000

J. Nelson, Capital                                         39,000

J. Nelson, Withdrawals                                 (2,100 )

Net Income                                                 $ 9,875

Total Liabilities + Equity                         $ 59,775

When the Nelson Company's current ratio is the measure of the company's ability to settle maturing short-term liabilities with short-term financial resources.  also, It is measured as the relationship between current assets and also current liabilities.

Although when Nelson's acid-test ratio takes away the encumbrances that can slow the conversion of current assets into cash for the settlement of current liabilities.  Thus, In this case, the inventory, stores supplies, and also prepaid insurance are excluded.

When Nelson has a robust gross margin ratio of more than 60%. This means that it can limit the cost of goods sold to below 40%. Thus, the management of Nelson Company is unable to control its periodic costs to generate reasonable net income, also as it can only turn less than 9% of the sales into returns for J. Nelson.

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Answer: a.fixed factory overhead volume variance.

Explanation:

Fixed overhead costs are the costs that are incurred by an organization that doesn't change even when the lre is a change in the volume of production activity. The fixed overhead costs are vital in order for the effective operation of the company.

When the standard fixed overhead rate is based on full capacity, the cost of available but unused productive capacity is indicated by the a.fixed factory overhead volume variance.

Variance is the data analysis tool that helps in measuring the gap between the actual and budgeted or the standard data. The standards are set based on past records and performances. There are various types of variances such as cost variance, efficiency variance, rate variance, volume variance, and many more.

The cost of available but unused productivity capacity is indicated by fixed factory overhead volume variance.

When the standard fixed overhead rate or can be said as the fixed overhead cost is constant and remains at full capacity irrespective of the changes in the volume of production activity.

In this case, the cost of productive capacity can be determined by using the fixed factory overhead volume variance. This is because it determines the difference between the fixed cost based upon the budgets and the production capacity.

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Answer:

Book Value Per Common Share = $33.80

Explanation:

Book Value Per Common Share = Stockholders' equity - Shares * Call Price per shares) / Shares of common stock outstanding

= ($626,575 - 825*63) / 17000

= ($626,575 - $51,975) / 17,000

= $574,600 / 17,000

= $33.80

Answer:

17.89%

Explanation:

Calculation Determine the average rate of return on the equipment

Using this formula

Average rate of return =Avarage annual income /Average investment

Where,

Avarage annual income=Annual saving - Annual depreciation- Annual operating costs

Average investment= (Beginning costs + Residual value)÷2

Let plug in the formula

Average rate of return=$20,210 - ($85,000- $7,000)÷10 years-$4,130/($85,000+$7,000)÷2

Average rate of return=$20,210-($78,000÷10)-$4,180/($92,000)÷2

Average rate of return=$20,210-$7,800-$4,180/$46,000

Average rate of return=$8,230/$46,000

Average rate of return=0.1789*100

Average rate of return=17.89%

Therefore the average rate of return on the equipment will be 17.89%

Answer:

18%

Explanation:

This can be calculated as using the formula for calculating the average rate of return as follows:

Average rate of return = Average annual income / Average investment in equipment .................. (1)

To use equation (1), we first calculate the following:

Annual cost saving = $20,210

Annual depreciation = (Equipment cost - Residual value) / Useful number of years = ($85,000 - $7,000) / 10 = $7,800

Annual operating and energy costs = $4,130

Average annual income = Annual cost saving - Annual depreciation - Annual operating and energy costs = $20,210 - $7,800 - $4,130 = $8,280

Average investment in equipment = (Equipment cost + Residual value) / 2 = $46,000

Substituting the values for Average annual income and Average investment in equipment into equation (1), we have:

Average rate of return = $8,280 / $46,000 = 0.18, or 18%

Answer:

a)

period     interest       interest       discount     amortized      bond's

               payment     expense     on BP          discount        carrying value

0                                                     49,320.60                        750,679.40

1               32,000       37,533.97   43,786.63   5,533.97       756,213.37

2              32,000       37,810.67    37,975.96   5,810.67       762,024.04

3              32,000       38,101.20    31,874.76     6,101.20       768,125.24

4              32,000       38,406.26   43,786.63   6,406.26      774,531.50

b)

December 31, 2017, accrued interest on bonds payable

Dr Interest expense 19,050.60

    Cr Interest payable 16,000

    Cr Discount on bonds payable 3,050.60

c)

total interest expense year 2007:

($37,533.97/2) + $37,810.67 + ($38,101.20/2) = $18,776.99 + $37,810.67 + $19,050.60 = $75,638.26

Explanation:

the market price of the bonds:

$800,000 / 1.05¹⁰ = $491,130.60

$32,000 x 8.1109 (PV annuity factor, 4%, 10 periods) = $259,548.80

market price = $750,679.40

discount on bonds payable $49,320.60

discount amortization first payment = (750,679.40 x 0.05) - 32,000 = 5,533.97

discount amortization second payment = (756,213.37 x 0.05) - 32,000 = 5,810.67

discount amortization third payment = (762,024.04 x 0.05) - 32,000 = 6,101.20

discount amortization fourth payment = (768,125.24 x 0.05) - 32,000 = 6,406.26

Answer:

P0 = $39.76

Explanation:

The dividend discount model or DDM can be used to calculate the price of the share today. The DDM values a stock based on the present value of the expected future dividends from the stock. The price of this stock under this model can be calculated as follows,

P0 = D0 * (1+g1) / (1+r)  + D0 * (1+g1) * (1+g2) / (1+r)^2  +  

[ (D0 * (1+g1) * (1+g2) * (1+g3) / (r - g3)) / (1+r)^2 ]

Where,

P0 = 2.43 * (1+0.15) / (1+0.115)  +  2.43 * (1+0.15) * (1+0.1) / (1+0.115)^2  +

[ (2.43 * (1+0.15) * (1+0.1) * (1+0.041) / (0.115 - 0.041)) / (1+0.115)^2 ]

P0 = $39.76

Answer:

Equity will increased by 50%

Explanation:

Given:

Number of stock = 300

Per share value = $80

Stock value decline = 25%

Find:

Customer's equity will ?

Computation:

Market value = 300 × $80 = $24,000

New market value = $24000 × (100% - 25%) = $18,000

Margin = $24000 × 50% = $12,000

Credit balance = $24,000 (100% / 75%)

Credit balance = $24,000 + $12,000

Credit balance = $36,000

Equity % = [Credit balance - New market value / Credit balance]100

Equity % = [($36,000 - $18,000) / $18,000]100

Equity will increased by 50%

Answer:loss on the sale of the equipment =$3,400

Explanation:

---We first compute the book value of the equipment

 Cost of asset=$94,000

accumulated depreciation = $73,000

Book Value of assets =  Cost of asset-accumulated depreciation

= $94,000 - $73,000= $21,000

---Gain or Loss on the asset

Sale value of equipment = $17,600

Book value of equpment= $21,000

loss on sale of equipment  = Sale value of equipment-Book value of equipment=$17,600-  $21,000= -$3,400

Answer:

real rate of return= 10.93%

Explanation:

The return on equity is the sum of the dividends earned and capital gains made during the holding period of the investment.

Dividend is the proportion of the profit made by a company which is paid to shareholders.  

Capital gains is another type of the return made on an equity investment as a result of increase in the value of the shares. It is difference between the cost of the share and the value at the time of disposal.

Therefore, we can can compute the return on the investment as follows:

Capital gain =  $69.49- 62.37 = 6.92

Dividend -= 1.77

Nominal return on stock= (1.77 + 6.92)/ 62.37 × 100 =  13.93 %

Inflation is the increase in the price level.It erodes the value of money.rise in the price of money  

Nominal interest is that quoted for investment or loan transactions. It has not been been adjusted for inflation.  

Real interest rate is the amount of interest in terms of the the quantity of good and services that can be purchased. It is the nominal interest rate adjusted for inflation.  

The relationship between inflation, real return and nominal return rate is given using the Fishers Effect;  

N = ( (1+R) × (1+F)) - 1  

N- nominal rate, R-real rate, F- inflation  

real rate of return = (1.1393)/ (1.027)- 1 = 0.1093

real rate of return = 0.1093 × 100 = 10.93%

real rate of return= 10.93%