The Internal Rate of Return Is Defined as The

question 269

Multiple Choice

The internal rate of return is defined as the:

• A) Average annual rate of return on a project.
• B) Average annual rate of return divided by the average book value of a project's fixed assets.
• C) Rate of return which yields a net present value equal to the initial investment in a project.
• D) Rate of return which causes the net present value of a project to equal zero.
• E) Rate of return which a cost-cutting, non-revenue generating project returns in an average year.

---

Definitions:

Overhead Applied

The amount of overhead costs allocated to products or services based on a predetermined overhead rate.

Direct Labor-Hours

The total hours of labor directly involved in the production of goods, a key factor in calculating labor costs.

Estimated Total Overhead

The projected total of all indirect production costs, including but not limited to utilities, rent, and administrative expenses.

Assembly Department

A section within a manufacturing facility where components are assembled into final products or where significant assembly work is performed.