Which of the Following Statements Is Correct

question 38

Multiple Choice

Which of the following statements is correct?

• A) Interest would not exist in a nonmonetary economy.
• B) The present value of a future dollar payment is directly related to the interest rate.
• C) The present value of a fixed dollar payment to be received in the future will decline as the length of the time before the payment will be received increases.
• D) During an extended inflationary period, the money (or nominal) interest rate will usually be lower than the real rate of interest.

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Definitions:

Departmental Predetermined Overhead Rates

Rates used to allocate overhead costs to products more accurately by setting individual rates for different departments.

Machine-Hours

The total number of hours that machinery is in operation during a specific period, often used as a basis for allocating manufacturing overhead.

Markup

The amount added to the cost of goods to cover overhead and profit when determining the selling price.

Selling Prices

The amounts of money charged to customers in exchange for goods or services.