Between Projects a and B,project a Will Be Considered a Superior

question 54

Multiple Choice

Between projects A and B,project A will be considered a superior financial undertaking if it has:

• A)A shorter payback period than project B.
• B)A lower average rate of return than project B.
• C)A lower net present value than project B.
• D)A longer payback period than project B.

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Definitions:

Variable Costs

Costs that vary directly with the level of production output, such as materials and labor.

Lawn-mowing

The action of cutting the grass in a yard or garden to maintain its appearance and health.

Perfectly Competitive

A market structure characterized by a large number of small firms, a homogeneous product, freedom of entry and exit, and perfect knowledge.

Fixed Cost

Expenses that do not change in proportion to the activity of a business, such as rent or salaries.