Use the Following to Answer Questions

question 1

Multiple Choice

Use the following to answer questions
Present and future value tables of $1 at 3% are presented below:

-Shelley wants to cash in her winning lottery ticket.She can either receive ten $100,000 semiannual payments starting today,or she can receive a lump-sum payment now based on a 6% annual interest rate.What is the equivalent lump-sum payment?

• A)$853,020.
• B)$801,969.
• C)$744,090.
• D)$878,611.

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Definitions:

Return on Investment

A performance measure used to evaluate the efficiency of an investment, calculated by dividing the profit from an investment by its cost.

Support Department Allocation Rate

A rate used to distribute the costs of support departments to producing or service departments based on their usage or consumption of support services.

Cost Drivers

Factors that cause variations in the cost of an activity or process, used in activity-based costing to allocate overhead costs more accurately.

Profit Center

A branch or division of a company that is directly responsible for generating a significant portion of the company's profits.