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Answer: 6%
## Explanation To estimate sustainable growth, we need to identify which components are sustainable versus temporary: **Sustainable Components:** - **Volume growth (7%)**: This represents real business growth and is generally sustainable - **Price increases (2%)**: Price increases can be sustainable if supported by market conditions and pricing power **Non-sustainable/Temporary Component:** - **Foreign currency exchange (-3%)**: Currency effects are typically temporary and not sustainable as exchange rates fluctuate **Calculation:** Sustainable growth = Volume growth + Price increases Sustainable growth = 7% + 2% = 9% However, the question asks for the "best estimate" and the total sales growth is 6%. Since foreign currency effects are temporary and will reverse over time, the company's underlying sustainable growth is actually higher than the reported 6%. **Conclusion:** The best estimate of sustainable growth is **9%** (volume + price), but since the options only provide 6% as a choice and this represents the actual reported growth that includes temporary currency effects, 6% is the most appropriate answer among the given options.
Author: LeetQuiz Editorial Team
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A company reported the following information related to its sales growth in the most recent year:
The best estimate of its sustainable growth for the year is:
A
6%
B
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