In Order to Calculate the NPV (Net Present Value)that Might

question 30

Multiple Choice

In order to calculate the NPV (net present value) that might be associated with a proposed product,it is necessary to:

• A)create a sales forecast.
• B)calculate the internal rate of return (IRR).
• C)define the payback period.
• D)assess costs.

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Definitions:

Theoretical Standard

A benchmark for the most efficient level of operating performance or cost control, assuming perfect conditions.

Fixed Overhead Volume Variance

The difference between the budgeted and actual overhead costs due to variations in production volume.

Machine Breakdowns

Unplanned events where machinery or equipment fails to function correctly, leading to production delays, increased maintenance costs, and potential operational losses.

Increase In Utility Costs

A rise in the expenses associated with utilities such as electricity, water, and gas consumed by a business or individual.