A Project Has an Initial Cost of $27,400 and a Market

question 69

Multiple Choice

A project has an initial cost of $27,400 and a market value of $32,600.What is the difference between these two values called?

• A)net present value
• B)internal return
• C)payback value
• D)profitability index
• E)discounted payback

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Definitions:

Raw Materials

are the basic, unprocessed inputs used in the manufacture of goods and products.

Indirect Materials

These are materials used in the production process that are not directly traceable to the finished product.

Production

The process of creating goods and services through the combination of labor, materials, and technology.

Direct Materials Cost

The cost of raw materials that can be directly traced to the production of goods, considered a variable cost in manufacturing.