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:

Profitable Product

A product that generates more revenue than the costs involved in its production, marketing, and distribution.

Variable Selling Expense

Costs that vary directly with the volume of sales, including commissions and shipping fees.

Specialized Machine

Equipment designed for a specific purpose or task in the production process, often custom-built or highly specialized.

Financial Advantage

The benefit or gain in financial terms that an entity has, allowing it to achieve better results than others.