If the Net Present Value of a Project Is -$10,000

question 26

Multiple Choice

If the net present value of a project is -$10,000, and the net present value of leasing for the project is +$12,000, calculate the APV (Adjusted present value) of the project:

• A) -$2,000
• B) $2,000
• C) $12,000
• D) -$10,000

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Definitions:

Direct Labor Budget

Direct labor budget is a financial plan that estimates the cost of direct labor required to meet production goals, detailing the amount and cost of the labor necessary for a specific period.

Labor-Hours Per Unit

Labor-hours per unit measures the amount of labor time required to produce one unit of a product.

Direct Labor Rate

The hourly wage rate paid to workers who are directly involved in manufacturing or producing goods.

Production Budget

A plan detailing the quantity of each product a company aims to produce within a specific timeframe, factoring in projected sales and inventory requirements.