Which of the Following Statements Is CORRECT? Assume That All

question 71

Multiple Choice

Which of the following statements is CORRECT? Assume that all projects being considered have normal cash flows and are equally risky.

• A) If a project's IRR is equal to its WACC, then under all reasonable conditions, the project's IRR must be negative.
• B) If a project's IRR is equal to its WACC, then under all reasonable conditions the project's NPV must be zero.
• C) There is no necessary relationship between a project's IRR, its WACC, and its NPV.
• D) When evaluating mutually exclusive projects, those projects with relatively long lives will tend to have relatively high NPVs when the cost of capital is relatively high.
• E) If a project's IRR is equal to its WACC, then, under all reasonable conditions, the project's NPV must be negative.

Know the accounting entries specific to a lean environment.

Understand the use of nonfinancial measures in lean manufacturing.

Recognize the importance of quality control costs in a lean environment.

Identify the application of lean practices to service industries and administrative processes.

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Definitions:

Direct Material

Raw materials that can be directly traced to the manufacturing of a specific product and are a significant portion of the production cost.

Direct Labor-Hours

A measure of the time worked by employees who are directly involved in the manufacturing process.

Variable Overhead

Expenses that vary depending on the amount of production or business operations, like utilities or raw materials.

Direct Materials

Ingredients that are specifically identifiable in the creation of a certain product.