Assume That $100 Is Deposited at the End of Each

question 77

Multiple Choice

Assume that $100 is deposited at the end of each year for five years at 10% compound interest and that no withdrawals are made over the five-year period. Based on this data, which one of the following statements is correct?

• A) The future value will be $550.
• B) The present value can be determined by computing the present value of $500 in five years at 10%.
• C) The present value can be determined by computing the present value of a $100 ordinary annuity for five years at 10%.
• D) The present value will be $500.

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Definitions:

Direct Labor Rate Variance

The difference between the actual cost of direct labor and the expected (or standard) cost, indicating discrepancies in workforce expenses.

Direct Labor Efficiency Variance

A measure of the difference between the actual hours worked and the standard hours expected for the production accomplished.

Favorable

A term used in budgeting and accounting to describe a financial result or variance that is better than expected or budgeted.

Flexible Budget

A budget that adjusts or scales according to changes in the volume of activity, revenue, or other factors.