Which of the Following Investment Rules May Not Use All

question 28

Multiple Choice

Which of the following investment rules may not use all possible cash flows in its calculations?

• A) NPV
• B) Payback period
• C) IRR
• D) All of the above

---

Definitions:

Inspection Cost

Expenses incurred to ensure products meet quality standards, including costs of labor, equipment, and facilities used in inspection.

Overhead Cost

Expenses related to the day-to-day running of a business that cannot be directly tied to a specific product or service, such as rent, utilities, and administrative salaries.

Machine Hours

This is a measure of the amount of time a machine is operated and is often used in the allocation of manufacturing overhead to products based on usage.

High-low Method

A method employed in managerial accounting that estimates variable and fixed costs by analyzing the most and least active periods.