Argyle Company Is Preparing the Operating Budget for the First

question 89

Essay

Argyle Company is preparing the operating budget for the first quarter of 2012. They forecast sales of $50,000 in January, $60,000 in February, and $70,000 in March. Variable and fixed expenses are as follows:
How much is the total operating expense for March?
A)$38,500
B)$47,500
C)$41,700
D)$43,000

• A)$38,500
• B)$47,500
• C)$41,700
• D)$43,000

---

Definitions:

YTM

Yield to Maturity; the total return anticipated on a bond if it is held until it matures, considering all interest payments and the principal repayment.

Interest Rate Risk

The potential for investment values to change due to variations in interest rates, affecting especially bonds and other fixed income investments.

Bond Prices

The amount of money required to purchase a bond, which can fluctuate based on interest rates, credit quality, and other factors.

Duration

A financial metric that calculates the weighted average time until a bond or a portfolio of bonds pays out its cash flows, used to assess interest rate risk.