Answer the Following Questions Using the Information Below

question 176

Multiple Choice

Answer the following questions using the information below:
Timothy Company has invested $1,000,000 in a plant to make vending machines. The target operating income desired from the plant is $150,000 annually. The company plans annual sales of 1,500 vending machines at a selling price of $1,000 each.
-What is the cost base of each vending machine for Timothy Company?

• A)$720
• B)$900
• C)$850
• D)$890

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Definitions:

Equation of Exchange

A monetary theory equation that states the money supply multiplied by the velocity of money equals the price level times the quantity of goods and services sold (MV = PQ).

Interest Rate

The part of a loan that incurs interest fees for the borrower, customarily indicated as an annual percentage of the unpaid loan.

Discretionary Policies

Economic strategies, involving government spending and taxation, that are implemented at the discretion of the government to manage economic fluctuations.

Monetarist Economists

Economists who believe that variations in the money supply have major influences on national output in the short run and the price level over longer periods.