If a Cost Object Such as a Product or Customer

question 6

Multiple Choice

If a cost object such as a product or customer has a positive green margin,then:

• A)its yellow margin will be positive.
• B)its yellow margin may be either positive,negative,or zero.
• C)its yellow margin will be negative.
• D)its yellow margin will be zero.

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Definitions:

Present Value

The current estimation of a future financial sum or series of payments, when discounted at a specific rate of return.

Discount Rate

The interest rate charged to commercial banks and other depository institutions for loans received from the central bank's discount window; also used in discounted cash flow (DCF) analysis to present value future cash flows.

Cash Flows

The total amount of money being transferred into and out of a business, especially affecting liquidity and financial stability.

Compounded Monthly

A method of calculating interest where the accumulated interest is added to the principal sum each month, leading to an increase in the total amount of interest earned.