QRC Company Is Trying to Decide Which One of Two

question 47

Multiple Choice

QRC Company is trying to decide which one of two alternatives it will accept.The costs and revenues associated with each alternative are listed below: $$\begin{array} { | l | r | r | r | } \hline & { \text { Alterrative A } } & \text { Alternative B } \\\hline \text { Projected reverue } & \$ 62,500 & \$ 75,000 \\\hline \text { Unit-level costs } & 12,500 & 18,000 \\\hline \text { Batch-level costs } & 6,250 & 12,000 \\\hline \text { Product-level costs } & 7,500 & 8,500 \\\hline \text { Facility-level costs } & 5,000 & 6,250 \\\hline\end{array}$$ What is the differential revenue for this decision?

• A) $25,000
• B) $12,500
• C) $62,500
• D) $75,000

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Definitions:

Annual Coupon

The yearly interest payment made to bondholders, usually fixed and expressed as a percentage of the bond's face value.

Market Risk

The possibility of investors experiencing losses due to factors that affect the overall performance of the financial markets.

Coupon Rate

The proportion of the bond's face value that is paid as interest each year, expressed in percentage terms.

Par Value

The issuer-designated value of a bond, share of stock, or coupon, known as its nominal or face value.