Use the Information in the Table (All Times Are in Days)to

question 17

Multiple Choice

Use the information in the table (all times are in days) to determine the lowest cost minimum completion time if the base cost for each activity finished in normal time is $1,000. $$\begin{array} { | l | l | l | l | l | } \hline & \text { Normal } & \text { Minimum } & \text { Crash Cost } & \\ \text { Activity } & \text { Time } & \text { Time } & \text { (\$/day) } & \text { Predecessor } \\\hline \text { A } & 10 & 6 & \$ 70 & - \\\hline \text { B } & 6 & 3 & \$ 40 & - \\\hline \text { C } & 2 & 2 & - & \text { B } \\\hline \text { D } & 4 & 2 & \$ 60 & \text { C } \\\hline \text { E } & 6 & 4 & \$ 80 & \text { A } \\\hline \text { F } & 8 & 5 & \$ 90 & \text { D, E } \\\hline\end{array}$$

• A) $7,120
• B) $6,910
• C) $6,790
• D) $6,830

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Definitions:

Accumulated Depreciation

The cumulative depreciation of an asset up to a single point in its life, reflecting the decrease in value due to wear, tear, or obsolescence.

Equity Method

An accounting technique used by firms to assess the profits earned by their investments in other companies, where the investment is accounted for initially at cost and adjusted thereafter for the post-acquisition change in the investor's share of the investee's net assets.

Joint Venture Investment

A joint venture investment is a business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task or business activity.

Acquisition Differential

The difference between the purchase price of an acquired company and the fair value of its identifiable tangible and intangible assets.