You Have Made an Investment of $250 That Will Yield

question 36

Multiple Choice

You have made an investment of $250 that will yield a profit of $30 in one year.If the interest rate is 11.5% is this a good investment.

• A) Yes, because the internal rate of return is greater than the interest rate
• B) Yes, because the internal rate of return is less than the interest rate
• C) No, because the internal rate of return is greater than the interest rate
• D) No, because the internal rate of return is less than the interest rate

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Definitions:

Direct Labor-Hours

The aggregate of hours spent by staff members who are directly engaged in producing merchandise or rendering a service.

Job-Order Costing

A cost accounting system that assigns costs to specific production batches or jobs, making it suitable for customized orders.

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead costs to individual products or job orders, based on a particular activity base.

Machine-Hours

A measure of production time used in cost accounting, representing the number of hours that machinery is in operation during a given period.