When Comparing Projects Using the Total Project Approach,a Manager Should

question 110

Multiple Choice

When comparing projects using the total project approach,a manager should choose the project with the ________.

• A) smallest net present value
• B) largest net present value
• C) zero net present value
• D) largest differential net present value

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Definitions:

Actual Price

The real or market price at which an asset or service is bought or sold.

Materials Price Variance

Materials price variance is the difference between the actual cost of materials used in production and the expected (or standard) cost, indicating efficient materials purchasing.

AQ × AP

Represents the multiplication of the Actual Quantity (AQ) by the Actual Price (AP), often used in financial and operational analyses.

Total Variance

The overall difference between planned or standard costs and the actual costs incurred.