The Present Value Index Indicates The

question 18

Multiple Choice

The present value index indicates the:

• A) time it will take to recover the initial cash outflow of an investment.
• B) additional cash inflows from operating activities.
• C) rate of return per dollar invested in a capital project.
• D) ratio of the net present value of an investment to the initial investment.

---

Definitions:

Direct Labor Hours

The number of labor hours spent by workers who are directly involved in the production of goods or services.

Materials Requisitions

Documents used to request the transfer of materials from inventory for production purposes or other internal use.

Job Cost Sheets

Documents that track and record all the costs associated with a specific job or project.

Cost Allocation

Cost Allocation is the process of identifying, aggregating, and assigning costs to cost objects such as products, departments, or projects to accurately represent where expenses are incurred.