A Company Has Accepted a Contract to Produce a Special

question 78

Multiple Choice

A company has accepted a contract to produce a special electric motor. The number of direct labour hours required to produce the first motor is 250. If an 85% learning curve applies to the production of motors, then the number of labour hours needed to produce the 4^th motor is

• A) 212.5 hours.
• B) 180.6 hours.
• C) 153.5 hours.
• D) 0 37.5 hours

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Definitions:

Market Rate of Return

The average rate of return of investments in the market over a specific period.

Coupon Bonds

Bonds that pay the holder a fixed interest payment (coupon) periodically until the maturity date, at which point the principal is repaid.

Rate of Return

The increase or decrease in an investment's value within a specific time frame, represented as a percent of the investment's original price.

Market Rate of Interest

The prevailing rate at which interest is paid by borrowers for loans or earned by investors for deposit accounts, typically influenced by the supply and demand for money in the economy.