You Can Borrow $25,000 at 1% Interest for 1 Year

question 12

Multiple Choice

You can borrow $25,000 at 1% interest for 1 year.The exchange rate for Australia is 1.25AUS/1US.The Australian Treasury is offering 2.5% risk free investments.What is the total profit you can make in 1 year?

• A) $625
• B) $450
• C) $250
• D) $375
• E) $425

---

Definitions:

First-in, First-out Method

An inventory valuation method where the first items purchased or produced are the first ones to be sold or used, affecting the cost of goods sold and ending inventory valuation.

Bottling Department

A specific production area within a manufacturing facility focused on the filling, sealing, and packaging of beverages into bottles.

Equivalent Units

A measure used in cost accounting to express the amount of work done on partially finished goods in terms of fully finished units.

Conversion Costs

The sum of direct labor and manufacturing overhead costs, representing the expenses to convert raw materials into finished products.