At Very Low Interest Rates, the "Rule of 72" Does

question 97

True/False

At very low interest rates, the "Rule of 72" does not approximate the compounding process well.

---

Definitions:

Contribution Margin

The amount by which sales revenue exceeds variable costs. It represents the portion of sales that helps to cover fixed costs.

Bottleneck Hour

The time period in a production process where the flow is constricted due to limitations in capacity or resources, causing delays.

Variable Cost Method

An accounting approach where variable costs are expensed as incurred and fixed costs are systematically allocated over time, typically used in costing and decision-making.

Cost-Plus Approach

A pricing strategy where the selling price is determined by adding a specific markup to a product's cost.