The Future Value of an Ordinary Annuity of $5,000 Invested

question 71

Multiple Choice

The future value of an ordinary annuity of $5,000 invested at 8% in 5 years would result in a value of:

• A) $25,000
• B) $7,345
• C) $29,335
• D) none of the above

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Definitions:

Variable Cost

Expenses that change in proportion to the level of production or sales volume, such as raw materials and direct labor.

Transfer Price

The rate at which products and services are exchanged among departments within the same organization.

Opportunity Cost

The value of the best alternative that is foregone when a particular decision is made.

Transfer Price

The price at which divisions of a company transact with each other, such as the trade of supplies or labor between departments.