Which of the Following Is True of Quantitative Methods of Analyzing

question 14

Multiple Choice

Which of the following is true of quantitative methods of analyzing new projects,particularly in rapidly changing environments?

• A) They enable managers to statistically compare projects.
• B) Their accuracy is unquestionable.
• C) Discounted cash flow methods and real options are the least recommended quantitative methods.
• D) They are particularly accurate in highly uncertain or rapidly changing environments.

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Definitions:

Incurred Costs

Expenses that a company has realized or committed to pay, often related to operations or production.

Fixed Manufacturing Cost Per Unit

The portion of total fixed manufacturing costs allocated to each unit of product, which remains constant on a per unit basis regardless of production volume.

Relevant Range

The range of activity within which the assumptions about fixed and variable costs are valid for the purposes of cost analysis and budgeting.

Conversion Costs

The sum of labor and overhead expenses required to convert raw materials into finished goods.