Figure 25-6
Anderson Company Manufactures Two Different Products: a and B

question 5

Multiple Choice

Figure 25-6
Anderson Company manufactures two different products: A and B. The company has 100 kgs of raw materials and 300 direct labour-hours available for production.
The time requirements and contribution margins per unit are as follows: $\begin{array}{lcr}&A&B\\\text { Raw materials per unit (lbs.) } & 1 & 2 \\\text { Direct-labour hours per unit } & 4 & 2 \\\text { Contribution margin per unit } & E 4 & E 5\end{array}$
-Refer to Figure 25-6. What is the equation for the constraint on direct labour?

• A)£1A + £2B < 300
• B)£4A + £2B < 100
• C)£4A + £5B < 100
• D)£4A + £2B < 300

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Definitions:

Default Risk

The risk that a borrower fails to make required payments on their debt obligations, leading to financial losses for the lender.

Interest Rate Risk

The potential for investment losses due to fluctuations in interest rates, affecting the value of interest-bearing assets like bonds.

Time To Maturity

The duration remaining until the final repayment date of a bond or other fixed-income security. It decreases as the bond approaches its maturity date.

Coupon Rate

Each year, the interest rate given on a bond calculated as a percentage of its nominal value.