Which of the Following Is True of the Future Value

question 73

Multiple Choice

Which of the following is true of the future value of an investment?

• A) The higher the interest rate, the higher the future value of an investment.
• B) The lower the interest rate, the higher the future value of an investment.
• C) The lower the number of compounding periods, the higher the future value of an investment.
• D) The lower the present value of an investment, the higher the future value of an investment.

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Definitions:

Variances

Differences between planned, budgeted, or standard costs and actual costs in business operations.

Cost Of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including materials, labor, and manufacturing overhead.

Accounting Period

A specific period of time used for financial reporting, typically a quarter or year, used to calculate financial performance.

Variable Overhead Spending Variance

The difference between the actual variable overhead costs incurred and the expected (or budgeted) costs, based on the actual level of production activity.