What Is the Equivalent Annual Cost for a Project That

question 52

Multiple Choice

What is the equivalent annual cost for a project that requires a $40,000 investment at time zero,and a $10,000 annual expense during each of the next 4 years,if the opportunity cost of capital is 10%?

• A) $20,000.00
• B) $21,356.95
• C) $22,618.83
• D) $25,237.66

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Definitions:

Direct Labor Wage Variance

The difference between the expected cost of direct labor for production and the actual cost incurred.

Direct Labor Efficiency Variance

The difference between the actual hours worked and the standard hours expected, multiplied by the standard labor rate.

Engineers

Professionals who apply scientific knowledge, mathematics, and ingenuity to develop solutions for technical, societal, and commercial problems.