The assumptions of the percentage of sales model include

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Reference no: EM131965270

1. The assumptions of the percentage of sales model include

constant equity.

constant accounts payable.

constant profit margin.

constant assets.

2. The cost pool divided by the cost base is the

overhead rate.

cost allocation.

marginal cost.

cost objective.

3. Which one of the following statements related to annuities and perpetuities is correct?

A. An ordinary annuity is worth more than an annuity due given equal annual cash flows for ten years at 7 percent interest, compounded annually.

B. A perpetuity comprised of $100 monthly payments is worth more than an annuity comprised of $100 monthly payments, given an interest rate of 12 percent, compounded monthly.

C. Most loans are a form of a perpetuity.

D. The present value of a perpetuity cannot be computed, but the future value can.

E. Perpetuities are finite but annuities are not.

Reference no: EM131965270

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