What Is the Present Value of the Following Investment Opportunity

question 183

Multiple Choice

What is the present value of the following investment opportunity. You invest $10,000 now and another $10,000 in one year. In return you receive $23,000 in two years. Other opportunities available with similar risk yield about 12%.

• A)$9406.60
• B)$593.40
• C)($593.40)
• D)$8,929

---

Definitions:

Volume Variance

A measure of the difference between the budgeted and actual volume of production, impacting costs.

Overhead Variances

The difference between actual overhead costs and the budgeted or standard overhead costs.

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead costs to products or job orders, calculated before the costs are actually incurred.

Labor-Hour

A unit of measure representing one hour of work by an employee, often used in costing and budgeting processes.