If the Net Present Value (NPV) of All Costs Is

question 52

True/False

If the net present value (NPV) of all costs is $100,000 and the NPV of all benefits is $170,000, then the ROI would be 35 percent.

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Definitions:

Overhead Allocation Rates

A rate used to distribute overhead costs to products or services based on a predetermined formula, such as the amount of direct labor hours or machine hours used.

Departmental Overhead Rates

The allocation of indirect costs to specific departments based on relevant activity bases, to accurately reflect the costs incurred by each department.

Overhead Costs

Indirect costs not directly tied to a specific job, product, or service but necessary for the business operations.

Process Involved

The series of actions or steps taken in order to achieve a particular end, typically in the context of manufacturing or business operations.