Leon's Has a "Don't Pay for One Year" Event on Right

question 47

Multiple Choice

Leon's has a "Don't Pay For One Year" event on right now at the store,so you purchase an Italian,hand-stitched leather sofa.You will pay $1,267.99 for the sofa in one year.Leon's charges 18% annual interest compounded monthly on overdue payments.If you forget and don't pay for the sofa until 6 months after payment is due,how much will you pay for the sofa at that time?

• A) $1,386.48
• B) $1,516.03
• C) $1,657.70
• D) $1,452.06
• E) $1,377.39

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Definitions:

Fixed Cost

Costs that do not vary with the production volume or level of services provided, such as rent, salaries, and insurance.

Salary

Salary refers to a fixed regular payment, typically paid on a monthly or biweekly basis but often expressed as an annual sum, made by an employer to an employee.

Incremental Manufacturing Cost

The additional cost incurred to produce an extra unit of a product, reflecting only those costs that directly change with the level of production.

Production

Production involves the processes and methods used to transform raw materials or components into finished goods or services.