If You Want to Review a Project from a Benefit-Cost

question 68

Multiple Choice

If you want to review a project from a benefit-cost perspective,you should use the _______ method of analysis.

• A) net present value
• B) payback
• C) internal rate of return
• D) average accounting return
• E) profitability index

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Definitions:

Idle Capacity

The unused portion of a company’s productive capacity, such as machinery or labor, that could be used for production but currently isn't.

Special Project

A temporary endeavor with a specific goal and timeline, which may require resources outside of the company's normal work scope.

Relevant Cost

Expenses that are directly tied to a specific business decision, which may affect the outcome of that decision.

Discounted Price

The reduced price of an item after applying a discount, which lowers the selling price from its original level.