A Project Requires an Initial Cash Outflow of $80,000

question 28

Multiple Choice

A project requires an initial cash outflow of $80,000. The investment is expected to produce net cash inflows of $15,000 each year for eight years. The internal rate of return on this investment
To the nearest tenth of a percent is

• A)6.7%.
• B)10.0%.
• C)18.8%.
• D)50.0%.

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Definitions:

Attainable Standards

Realistic targets for costs or productivity set by management, which are challenging yet achievable under normal working conditions.

Materials Quantity Variance

The deviation of the actual materials used from the expected standard quantity in production, times the standard unit cost.

Controllable Overhead Variances

The differences between the budgeted and actual overhead costs that management can control or influence.

Volume Overhead Variances

The difference between the expected (budgeted) overhead costs based on standard volume and the actual overhead costs incurred.