Merced Corporation Estimates That an Investment of $600, 000 Would

question 57

Multiple Choice

Merced Corporation estimates that an investment of $600, 000 would be necessary to produce and sell 50, 000 units of a new product each year.Other costs associated with the new product would be: The company requires a 15% return on the investment in all products.The company uses the absorption costing approach costing to pricing as described in the text. The selling price would be closest to:

• A)$28.71
• B)$26.50
• C)$22.00
• D)$32.67

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Definitions:

Current Account

A component of a country's balance of payments that measures the trade of goods and services, net income, and direct transfers with the rest of the world.

Financial Account

A component of the balance of payments that records investment flows and holdings of foreign assets by domestic residents and domestic assets by foreigners.

Official Reserves

Foreign currencies owned by the central bank of a nation.

Balance Of Payments

A document detailing every financial transaction between a country's inhabitants and international entities within a specific timeframe.