An investor has the choice between two investments. Investment Easy offers interest of 8% per year compounded quarterly for a period of three years. Investment Difficult offers one interest payment of 20% at the end of its four-year life.What is the annual effective interest rate offered by the two investments?
A. 8.00% 4.66%
B. 8.00%5.00%
C. 8.24%4.66%
D. 8.24%5.00%
X Limited has 500 kg of material K in inventory for which it paid $2,000. The material is no longer in use in the company and could be sold for $1.50 per kg.X Limited is considering taking on a single special order which will require 800 kg of material K. The current purchase price of material K is $5 per kg.In the assessment of the relevant cost of the decision to accept the special order, the cost of material K is:
A sunk cost of $2,000
B. A sunk cost of $2,000 and an incremental cost of $1,500
C. An opportunity cost of $750 and an incremental cost of $1,500
D.An incremental cost of $4,000