If Money If Worth $650 Now and $675 in 3

question 196

Multiple Choice

If money if worth $650 now and $675 in 3 months, determine the rate of return that an investor would be indifferent between the two options.

• A) 15.38%
• B) 14.22%
• C) 13.85%
• D) 12.52%
• E) 10.60%

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Definitions:

Volume Variance

A financial term that represents the difference between the expected (budgeted) volume of production or sales and the actual volume achieved.

Spending Variance

The difference between the budgeted or planned amount of expense and the actual amount spent.

Variable Overhead Spending Variance

The difference between the actual costs incurred for variable overheads and the expected costs of variable overheads based on standard cost.

Fixed Overhead Spending Variance

This metric measures the difference between the actual fixed overhead costs incurred and the budgeted (or standard) fixed overhead costs.