Techno Inc

question 50

Multiple Choice

Techno Inc.is a computer hardware company that gets its computer parts from countries that manufacture them for lesser price than what its competitors pay and at a better quality.This allows Techno to save on the prices paid for the raw materials and use them to increase its production volume.Which of the following is Techno Inc.practicing in order to attain cost advantage?

• A)Transportation rates
• B)Raw material rates
• C)Exchange rates
• D)Wage rates

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Definitions:

Present Value

The current value of a future sum of money or stream of cash flows, given a specified rate of return.

Compound Interest

The addition of interest to the principal sum of a loan or deposit, where the interest that has been added also earns interest.

Equal Payments

A repayment structure where payments are the same amount each period, as seen in some loans and mortgages.

Annuity Due

An annuity whose payments are made at the beginning of each period.