What Is the Future Value of the Following Cash Flows

question 42

Multiple Choice

What is the future value of the following cash flows in year 5 with an interest rate of 6%? $$\begin{array} { | c | c | } \hline \text { Year } & \text { Cash Flow } \\\hline 1 & \$ 200 \\\hline 2 & \$ 400 \\\hline 3 & \$ 600 \\\hline 4 & \$ 800 \\\hline 5 & \$ 1000 \\\hline\end{array}$$

• A)$3,251.06
• B)$3,446.13
• C)$3,067.04
• D)$3,000.00
• E)$3,180.00

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Definitions:

Fixed Manufacturing Overhead

The fixed costs that are incurred during the manufacturing process, including costs such as rent, insurance, and salaries for management, that do not vary with production volume.

Predetermined Overhead Rate

A rate calculated before a production period begins, used to allocate manufacturing overhead costs to products based on a chosen activity base.

Variable Manufacturing Overhead

Variable manufacturing overhead consists of manufacturing costs that fluctuate with production volume, such as indirect materials and utility costs.

Fixed Manufacturing Overhead

The sum of all consistent, non-variable costs associated with manufacturing, including salaries of supervisors and rent of the facility.