The Management of Musselman Corporation Would Like to Set the Selling

question 18

Multiple Choice

The management of Musselman Corporation would like to set the selling price on a new product using the absorption costing approach to cost-plus pricing. The company's accounting department has supplied the following estimates for the new product:
Management plans to produce and sell 9,000 units of the new product annually. The new product would require an investment of $1,305,000 and has a required return on investment of 10%.
-The selling price would be closest to:

• A) $28.71
• B) $26.50
• C) $22.00
• D) $32.67

Understand the concept of present value and how it applies to real and nominal cash flows.

Calculate the present value of bonds, including zero-coupon and coupon-bearing bonds.

Understand and apply the concepts of yield to maturity and coupon rates to determine bond values.

Calculate the price of bonds given different market conditions, including interest rates and time to maturity.