You Are Opening Up a Brand-New Retail Strip Mall

question 76

Multiple Choice

You are opening up a brand-new retail strip mall.You presently have more potential retail outlets wanting to locate in your mall than you have space available.What is the most appropriate tool to use if you are trying to determine the optimal allocation of your retail space?

• A)IRR
• B)Payback period
• C)NPV
• D)Profitability index

---

Definitions:

Assembly

The process of putting together various components to create a finished product.

Predetermined Overhead Rates

The estimated overhead cost per unit of the allocation base, calculated at the beginning of the period.

Machine-Hours

The total amount of time machines are operated to produce goods.

Manufacturing Departments

Divisions within a manufacturing organization, each specializing in different stages of the production process, from raw materials processing to finished products.