When Using a Target Costing Approach,the Company Starts with Revenue

question 152

True/False

When using a target costing approach,the company starts with revenue at market price,and then subtracts its desired profit,to yield the target total cost.

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Definitions:

IRR Cross-Over Rate

The rate of return at which two different investments have the same net present value; used in comparing project alternatives.

Annual Cash Flow

The net amount of cash and cash-equivalents moving into and out of a business in a given fiscal year.

Payback Period

The length of time required to recoup the funds expended in an investment, or the time taken for an investment's returns to cover its cost.

Investment's Cash Flows

The inflows and outflows of cash associated with investments, including initial costs, returns, dividends, and final sale values.