Use Table 12-2 from Your Text to Calculate the Present

question 50

Short Answer

Use Table 12-2 from your text to calculate the present value of the ordinary annuity, rounding to the nearest cent. $$\begin{array} { l l l l l } \text { Annuity } & \text { Payment } & \text { Time } & \text { Nominal } & \text { Present Value } \\\text { Payments } & \text { Frequency } & \underline { \text { Period } } & \underline { \text { Rate } } & \text { of the Annuity } \\\hline \$ 1,000 & \text { every } 3 \text { months } & 1 \frac { 3 } { 4 } \mathrm { yrs } & 12 \% & \\\end{array}$$

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Definitions:

Product Development

The creation of new products or improvements to existing products to meet customer needs or market opportunities.

Activity Rate

The predetermined overhead rate used in activity-based costing to allocate overhead costs to cost objects based on their usage of activities.

Engineering Change

A modification to a product’s design, production process, or materials, usually made to improve functionality or to reduce costs.

Allocation Base

A criterion or standard used to distribute overhead costs among various cost objects.