Martin Invested $1,000 Six Years Ago and Expected to Have

question 36

Multiple Choice

Martin invested $1,000 six years ago and expected to have $1,500 today.He has not added or withdrawn any money from this account since his initial investment.All interest was reinvested in the account.As it turns out,Martin only has $1,420 in his account today.Which one of the following must be true?

• A)Martin earned simple interest rather than compound interest.
• B)Martin earned a lower interest rate than he expected.
• C)Martin did not earn any interest on interest as he expected.
• D)Martin ignored the Rule of 72 which caused his account to decrease in value.
• E)The future value interest factor turned out to be higher than Martin expected.

Apply the standard cost formula in calculating total costs.

Understand the concepts of fixed, variable, and total costs within the relevant range.

Calculate product costs for financial reporting purposes.

Analyze the effect of changes in activity level on costs and per unit calculations.

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Definitions:

Income Before Taxes

The total revenue a company generates minus the total expenses before income tax expense is subtracted; an indicator of a company's pre-tax profitability.

Earnings Per Share

A financial ratio that indicates the portion of a company's profit allocated to each outstanding share of common stock, serving as an indicator of a company's profitability.

IFRS

International Financial Reporting Standards, which are a set of accounting standards developed by the International Accounting Standards Board for global use.

Comprehensive Income

The total change in equity for a reporting period other than transactions from owners, encompassing all gains and losses that are not recognized in the profit or loss.