Based on the Net Present Value Method of Analysis and Given

question 1

Multiple Choice

Based on the net present value method of analysis and given the information in the problem,you should:

• A)accept both project A and project B.
• B)accept project A and reject project B.
• C)accept project B and reject project A.
• D)reject both project A and project B.
• E)accept whichever one you want as they represent equal opportunities.

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Definitions:

Total Variable Costs

The sum of all costs that change with the level of output, such as materials and labor directly involved in production.

Average Fixed Cost

The total fixed costs of production divided by the quantity of output produced.

Marginal Cost

The extra cost incurred from the production of an additional unit, emphasizing its role in decision-making processes.

Average Total Cost

The aggregate expense of manufacturing divided by the total number of units produced.