Based on the Most Recent Survey Information Presented in Your

question 8

Multiple Choice

Based on the most recent survey information presented in your textbook, CFOs tend to use which two methods of investment analysis the most frequently?

• A)Payback and net present value
• B)Payback and internal rate of return
• C)Internal rate of return and net present value
• D)Net present value and profitability index
• E)Profitability index and internal rate of return

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Definitions:

Standard Variable Overhead Rate

The rate used in budgeting and costing that applies variable overheads to a specific activity basis such as labor hours.

Direct Labour Hours

The aggregate hours employees devoted to the process of production have logged.

Variable Overhead

Costs that vary with the level of output, such as utilities and labor, as opposed to fixed overheads.

Actual Direct Labour Hours

The actual time spent by labor directly involved in the production of goods or service delivery.