Compton Corporation, with Operations Throughout the Country, Will Soon Allocate

question 18

Multiple Choice

Compton Corporation, with operations throughout the country, will soon allocate corporate overhead to the firm's various responsibility centers. Which of the following is definitely not a cost object in this situation?

• A) The maintenance department.
• B) Product no. 675.
• C) Compton Corporation.
• D) The Midwest division.
• E) The telemarketing center.

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Definitions:

Required Return

The minimum expected yield by investors to justify the risk of the investment.

Independent Projects

Investment projects whose cash flows are not affected by the accept or reject decision for any other project, allowing for independent evaluation.

IRR

Internal Rate of Return, a financial metric used to estimate the profitability of potential investments through calculating the rate of return where the net present value of all the cash flows (both positive and negative) from a project or investment equal zero.