Answer:
C. The present value of cash flows in Investment A is higher than the present value of cash flows in Investment B.
Explanation:
Typically, discount rate represents cost of capital or funds used to finance the investment. This implies that the higher the cost of capital , the lower the present value of cash inflow on the investment and vice-versa.
Hence, the present value of cash flows in Investment A is higher than the present value of cash flows in Investment B, because A has a lower discount rate.
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Answer:
$417 A.
It is an adverse variance.
Explanation:
Fixed factory overhead volume variance is the difference between budgeted output at 100% normal capacity and actual production volume multiplied by standard fixed overhead cost per unit.
Formula
Fixed factory overhead volume variance = (budgeted standard hours for 100% normal capacity - Actual standard output hours) × standard fixed overhead cost per unit.
Calculation
Since 5900 units of a product was produced in 3.546 standard hours per unit, total actual standard hour is therefore;
= 5900×3.546
=20,921 hours
Overhead cost per unit = $1.10 per hour
Hours at 100% normal capacity = 21,300 hours.
Recall the formula for fixed factory overhead volume variance is =(budgeted standard hours for 100% normal output- actual standard output hours)× standard fixed overhead per unit.
Therefore;
Fixed factory overhead volume variance =(21,300 hours - 20,921 hours)× $1.10
=379 hours × $1.10
=$417 A
It is therefore an adverse variance.
Answer:
Total FV= $678.615.02
Explanation:
<u>First, we need to calculate the value of the annuity at the end of the last payment:</u>
FV= {A*[(1+i)^n-1]}/i
A= annual deposit
FV= {2,000*[(1.06^30) - 1]} / 0.06
FV= $158,116.37
<u>Now, the total future value after 25 years:</u>
FV= PV*(1 + i)^n
FV= 158,116.37*(1.06^25)
FV= $678.615.02