Given Below Is an Excerpt from a Management Performance Report

question 73

Multiple Choice

Given below is an excerpt from a management performance report for a profit centre: $\begin{array}{llll}&\underline{\text { Budget }}&\underline{\text { Actual }}&\underline{\text {Difference }}\\\text { Contribution margin } & \$ 1,040,000 & \$ 1,020,000 & \$ 20,000 \\\text { Controllable fixed costs } & 430,000 & 420,000 & 10,000\end{array}$

How well did the manager perform overall?

• A)$20,000 below expectations
• B)$40,000 below expectations
• C)equal to expectations
• D)The ROI needs to be known for a total assessment.

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Definitions:

Effective Annual Rate

The actual rate of interest on an investment or loan, taking into account the effect of compounding over a given period.

Compounded

A method of calculating interest where the earned interest on an investment is added to the principal, and future interest is calculated on the total amount.

Annuity

A fiscal product designed to emit a stable series of disbursements to an individual, chiefly intended as support for retired people's income.

Perpetuity

A type of annuity that pays an infinite series of cash flows, continuing forever.