Compute the Present Value of $46,000,invested for Six Years at 8

question 172

Multiple Choice

Compute the present value of $46,000,invested for six years at 8%. Present value of $1:
$$\begin{array} { | l | l | l | l | l | l | } \hline & 5 \% & 6 \% & 7 \% & 8 \% & 9 \% \\\hline 3 & 0.864 & 0.840 & 0.816 & 0.794 & 0.772 \\\hline 4 & 0.823 & 0.792 & 0.763 & 0.735 & 0.708 \\\hline 5 & 0.784 & 0.747 & 0.713 & 0.681 & 0.650 \\\hline 6 & 0.746 & 0.705 & 0.666 & 0.630 & 0.596 \\\hline 7 & 0.711 & 0.665 & 0.623 & 0.583 & 0.547 \\\hline\end{array}$$

• A) $36,647
• B) $25,300
• C) $32,660
• D) $28,980

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Definitions:

Absorption Costing

This accounting style integrates all facets of manufacturing costs—direct materials, direct labor, and both variable and fixed overheads—into the comprehensive cost of a product.

Markup

The amount added to the cost of goods to cover overhead and profit, determining the selling price.

Variable Selling

Expenses that change in proportion to the volume of goods or services sold, such as commissions and shipping fees.

Special Order

A one-time order that is not usually part of the company's normal ongoing operations, often requiring special pricing or terms.