Which of the Following Is a Numeric Project Selection Method

question 80

Multiple Choice

Which of the following is a numeric project selection method?

• A) Comparative benefits
• B) Payback period
• C) Q-sort method
• D) Operating/competitive necessity
• E) Sacred cow

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Definitions:

Degree of Operating Leverage

The Degree of Operating Leverage is a measure that assesses the sensitivity of a company's operating income to changes in its sales volume, indicating the percentage change in operating income for a percentage change in sales.

Net Operating Income

A measure of a company's profitability from its regular business operations, deducting operating expenses from gross income.

Operating Leverage

A measure of how sensitive a company's operating income is to a change in its sales revenue, indicating the proportion of fixed to variable costs.

Net Operating Income

The profit a company generates from its operations, before taxes and interest, from its primary business activities.