A Defence Contractor Has Just Started Producing Turbines for a New

question 67

Multiple Choice

A defence contractor has just started producing turbines for a new government contract. The first turbine took 7000 hours to produce. If the learning curve is 90%, how long will it take to produce the 10th turbine? (Use at least three decimals in the exponent if you use the logarithmic approach.)

• A) less than 4800 hours
• B) from 4800 to 4900 hours
• C) from 4900 to 5000 hours
• D) from 5000 to 5100 hours
• E) over 5100 hours

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Definitions:

Direct Method

A method of computing the net cash provided by operating activities in which the income statement is reconstructed on a cash basis from top to bottom.

Indirect Method

A reporting approach used in cash flow statements where net income is adjusted for non-cash transactions and changes in working capital to arrive at cash flow from operating activities.

Financing Activities

Transactions related to raising capital and repaying investors, affecting the company's equity and long-term debt.

Free Cash Flow

The amount of cash generated by a business after accounting for capital expenditures, essential for maintaining or expanding assets.