Ten Years Ago,you Put $150,000 into an Interest-Earning Account

question 21

Multiple Choice

Ten years ago,you put $150,000 into an interest-earning account.Today it is worth $275,000.What is the effective annual interest earned on the account?

• A)47.99%
• B)6.00%
• C)6.25%
• D)8.33%

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Definitions:

Conversion Costs

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

Materials Cost

The cost of materials that are used in the production of goods; a component of the total cost of goods sold.

Weighted-Average Method

An inventory costing method that calculates the cost of ending inventory and cost of goods sold based on the average cost of all goods available for sale during the period.

Conversion Costs

Combined costs of direct labor and manufacturing overhead, representing the costs to convert raw materials into finished goods.