Midwest Rocks Receives and Produces an Order

question 96

Multiple Choice

Midwest Rocks receives and produces an order.What is the company's value-added time assuming the following times were measured during production of this order?
Process time: .7 days Inspection time: .25 days Move time: 1.05 days Wait time: .5 days

• A) 1.8 days
• B) .7 days
• C) .95 days
• D) 2 days
• E) 2.5 days

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Definitions:

Annual Interest Payment

The total amount of interest to be paid each year on a loan, bond, or other financial instrument.

Straight-line Method

A depreciation method that allocates an equal portion of the initial cost of an asset to each year of its useful life.

Present Value

The current value of a future sum of money or stream of cash flows given a specified rate of return, accounting for time value of money.

Compounded Annually

A method of calculating interest where the interest is added to the principal at the end of each year, and the following year's interest is calculated on the total amount.