Which of the Following Statements Is CORRECT

question 33

Multiple Choice

Which of the following statements is CORRECT?

• A) an example of an externality is a situation where a bank opens a new office, and that new office causes deposits in the bank's other offices to increase.
• B) the npv method automatically deals correctly with externalities, even if the externalities are not specifically identified, but the irr method does not. this is another reason to favor the npv.
• C) both the npv and irr methods deal correctly with externalities, even if the externalities are not specifically identified. however, the payback method does not.
• D) identifying an externality can never lead to an increase in the calculated npv.
• E) an externality is a situation where a project would have an adverse effect on some other part of the firm's overall operations. if the project would have a favorable effect on other operations, then this is not an externality.

Calculate break-even points for individual divisions and the company as a whole.

Understand the allocation of common fixed expenses to divisions and its impact on division performance.

Interpret financial data to make informed decisions on product discontinuation, division performance, and overall company profitability.

Understand the concept of absorption costing and its application in product costing.

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Definitions:

Inferential Statistics

A branch of statistics that allows for making predictions or inferences about a population based on a random sample from that population.

Academic Achievement

The extent of a student's success in meeting short- or long-term goals in education, often measured by grades, tests, or degree completion.

Larger Population

A term referring to a bigger group or number of individuals within a specified area or demographic.

Creativity

The ability to produce original and valuable ideas, involving imagination and the ability to generate solutions to problems.