All of the Following Are Advantages of the NPV/payback Approach

question 64

Multiple Choice

All of the following are advantages of the NPV/payback approach to risk analysis EXCEPT it ______.

• A) is easy and inexpensive to apply
• B) considers a project's liquidity
• C) explicitly considers the variability of a project's return
• D) is consistent with the notion that risk increases with futurity

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Definitions:

Direct Labor Rate

The cost per hour for labor directly involved in manufacturing goods or providing services.

Production Budget

A plan that outlines the expected production in units, considering sales forecasts and inventory requirements.

Direct Labor-Hours

The total hours worked directly on the production of goods or the provision of services.

Direct Labor Rate

The cost per hour for direct labor incurred in the production of goods.