Use the Table for the Question(s)below

question 76

Multiple Choice

Use the table for the question(s) below.
Suppose the term structure of interest rates is shown below:

-The net present value (NPV) of an investment that costs $2 700 and pays $1 000 at the end of one, three, and five years is closest to:

• A)$1 665.62
• B)-$100.26
• C)$21.47
• D)-$71.38

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Definitions:

Standard Hours Allowed

The amount of work hours allocated for the completion of a specific task, based on standard performance.

Materials Price Variance

The difference between the actual cost of materials purchased and the expected (standard) cost, indicating how material cost fluctuations affect production costs.

Quantity Standard

The expected or budgeted quantity regarding inputs or outputs, used as a performance measure or pricing basis.

Price Standard

A predetermined cost that represents what should be paid for a unit of input, such as materials or labor.