Exhibit 16

question 52

Multiple Choice

Exhibit 16.2.Typically,the sales volume declines with an increase of a product price.It has been observed,however,that for some luxury goods the sales volume may increase when the price increases.The following Excel output illustrates this rather unusual relationship. Refer to Exhibit 16.2.For which two prices are the sales predicted by the quadratic equation are 1700 units?

• A)60.51 and 150.15
• B)61.51 and 151.15
• C)62.51 and 152.15
• D)63.51 and 153.15

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Definitions:

Face Value

The nominal value printed on a financial instrument like a bond or a stock certificate, representing its legal value.

Present Value

The current worth of a future sum of money or stream of cash flows given a specified rate of return, used in discounting and investment appraisal.

Fair Value

Fair value refers to the estimated market value of an asset or liability, based on current market conditions and comparable transactions, used in financial reporting.

Capital Lease

A lease considered to have the economic characteristics of asset ownership for accounting purposes.