Which One of the Following Is a Project Acceptance Indicator

question 7

Multiple Choice

Which one of the following is a project acceptance indicator given an independent project with investing type cash flows? 

• A) Profitability index that is less than 1.0 
• B) Project's internal rate of return that is less than the required return 
• C) Discounted payback period that is greater than the required return 
• D) Average accounting return that is less than the internal rate of return 
• E) Modified internal rate of return that exceeds the required return 

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Definitions:

Direct Materials

Raw materials that can be directly identified with the production of finished goods in a manufacturing process.

Direct Labor

Direct labor refers to the wages paid to workers directly involved in the production of goods or the delivery of services.

Factory Overhead

Costs associated with operating a factory that are not directly tied to a specific unit of production, such as maintenance, utilities, and salaries of supervisors.

Work in Process Inventory

An inventory account that records the costs associated with products that are partially completed by a company.