Given a Discount Rate of 0%,which of the Following Has

question 49

Multiple Choice

Given a discount rate of 0%,which of the following has the greatest present value? ONE,a series of 10 equal annual end-of-the cash flows of $100 each,TWO,just like ONE except the first 5 cash flows are only $50 but the last 5 cash flows are $150,or THREE,just like ONE except the 10 $100 cash flows are at the beginning of the period.

• A)ONE
• B)TWO
• C)THREE
• D)The choices all have equal present values.

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Definitions:

Predetermined Overhead Rate

A calculated rate that estimates the manufacturing overhead cost per unit of production, based on expected or historical data.

Machine-Hours

A measure of the amount of time a machine is operated during a given period, commonly used in manufacturing to allocate costs or to measure productivity.

Manufacturing Overhead Costs

All indirect costs associated with the manufacturing process, including utilities, rent, and salaries for non-direct labor.

Direct Labor-Hours

A measure of the total hours worked directly on a specific job or task, excluding indirect labor involved in general factory supervision or maintenance.