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
A company is considering accepting a one-year contract which will require four skilled employees. The four skilled employees could be recruited on a one-year contract at a cost of $40,000 per employee. The employees would be supervised by an existing manager who earns $50,000 per annum. It is expected that supervision of the contract would take 15% of the manager's time.Instead of recruiting new employees the company could retrain some existing employees who currently earn $35,000 per year. The training would cost $15,000 in total. If these employees were used they would need to be replaced at a total cost of $95,000.What is the relevant labour cost of the contract?
A. $210,000
B. $110,000
C. $160,000
D. $195,000
Six years ago material M cost $10 per kg and the price index most appropriate to the cost of material M was 130. The same index show stands at 510.What is the best estimate of the current cost of material M per kg?
A. $2.55
B. $29.23
C. $39.23
D. $51.00