You Are Considering Two Investments: a and B

question 44

Multiple Choice

You are considering two investments: A and B.Both investments provide a cash flow of $100 per year for n years.However,investment A receives the cash flow at the beginning of each year,while investment B receives the cash at the end of each year.If the present value of cash flows from investment A is P,and the discount rate is c,what is the present value of the cash flows from investment B?

• A)P/(1 + c)
• B)P(1 + c)
• C)P/(1 + c)ⁿ
• D)P(1 + c)ⁿ

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Definitions:

Budgeted Cost

An estimate of the expenses for various operations, projects, or activities planned for a specific period.

Activity Cost Pools

A grouping of all costs associated with a particular activity, used in activity-based costing to allocate costs more accurately to products or services.

Plantwide Overhead Allocation

A method of allocating indirect costs to products based on a single overhead rate used throughout an entire plant or company.

Budgeted Costs

Estimated financial expenditures forecasted for a specific future period, often categorized by type or department.