Which One of the Following Methods of Analysis Has the Greatest

question 9

Multiple Choice

Which one of the following methods of analysis has the greatest bias toward short-term projects?

• A)Net present value
• B)Internal rate of return
• C)Average accounting return
• D)Profitability index
• E)Payback

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Definitions:

Manufacturing Overhead Costs

Indirect expenses related to the production process, such as utilities, depreciation, and salaries for factory support staff.

Return on Investment

A measure used to evaluate the efficiency or profitability of an investment, calculated by dividing the benefit (return) of an investment by the cost of the investment.

Investment Center

A business unit within an organization that is responsible for its own revenues, expenses, and investments, and is evaluated on its return on investment.

Operating Assets

Assets that are used in the daily operations of a business to generate revenue, such as machinery, buildings, and equipment.