Each Unit of Product Requires 16 Kilograms of Material

question 65

Multiple Choice

Each unit of product requires 16 kilograms of material.Due to scrap and rework,each unit has been averaging 18 kilograms of material.The material costs $4 per pound.What are the non-value-added costs?

• A)$4
• B)$8
• C)$64
• D)$72

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Definitions:

Required Return

The lowest yearly percent return on an investment necessary to attract individual or corporate investors to a specific security or project.

Constant-Growth Formula

A formula used to estimate the value of a stock by assuming constant growth in dividends.

Discount Rate

The interest rate charged to commercial banks and other depository institutions on loans they receive from their regional Federal Reserve Bank's lending facility.

Plowback Ratio

The proportion of earnings retained by a company after dividends have been paid out, indicating the level of reinvestment in the business.