Which of the Following Statements Is Correct

question 119

Multiple Choice

Which of the following statements is correct?

• A) Simple rates can't be used in present value or future value calculations because they fail to account for compounding effects.
• B) The periodic interest rate can be used directly in calculations as long as the number of payments per year is greater than or equal to the number of compounding periods per year.
• C) In all cases where interest is added or payments are made more frequently than annually,the periodic rate is less than the annual rate.
• D) Generally,the APR is greater than the EAR as a result of compounding effects.
• E) If the compounding period is semiannual then the periodic rate will equal the effective annual rate divided by two.

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Definitions:

Advertising Expense

The cost associated with promoting a business, product, or service, including media buys, production costs, and agency fees.

Service Department Expenses

Costs associated with the departments that do not directly generate revenue but support other departments that do.

Indirect Factory Expenses

Costs associated with manufacturing that are not directly tied to the product, such as maintenance or factory utilities.

Square Footage

A measurement of area expressed in square feet, commonly used to specify the size of buildings or rooms.