All the Following Would Typically Be Considered Indirect Costs of Manufacturing

question 64

True/False

All the following would typically be considered indirect costs of manufacturing a
particular Boeing 747 to be delivered to Singapore Airlines: electricity to run production equipment, the factory manager's salary, and the cost of the General Electric jet engines installed on the aircraft.

---

Definitions:

Net Present Value

The calculation that compares the value of a dollar today to the value of that same dollar in the future, taking inflation and returns into account.

Cost of Capital

The return rate that a company must earn on its investment projects to maintain its market value and attract funds.

Capital Rationing

The process of selecting the best projects for investment under conditions of limited resources, ensuring optimal utilization of capital.

Negative NPVs

Situations where the Net Present Value of an investment is less than zero, indicating that the project’s projected earnings, discounted back to the present value, are less than the initial investment, suggesting it may not be profitable.