Given the Following Data Based on the Data Given,what Would Be the Annual Cost

question 17

Multiple Choice

Given the following data: $\begin{array} { l r } \text { Present Investment Required } & \$ 12,000 \\\text { Net Present Value } & \$ 430 \\\text { Annual Cost Savings } & \$ ? \\\text { Discount Rate } & 12 \% \\\text { Life of the Project } & 10 \text { years }\end{array}$ Based on the data given,what would be the annual cost savings? (Ignore income taxes in this problem.)

• A) $1,630.00.
• B) $2,123.89.
• C) $2,200.00.
• D) $2,553.89.

---

Definitions:

Conversion Cost

Refers to expenses incurred in the process of transforming raw materials into finished goods, encompassing both labor and overhead costs in manufacturing.

Direct Labour

The workforce engaged in the hands-on manufacturing or processing of products, whose costs are directly assigned to the production cost.

Manufacturing Overhead

All indirect costs associated with the production process, including utilities, maintenance, and factory management expenses, not directly tied to specific units produced.

Variable Product Cost

Costs that vary directly with the volume of production, such as materials and labor directly involved in manufacturing.