According to Graham and Harvey's 2001 Survey (Figure 8

question 41

Multiple Choice

According to Graham and Harvey's 2001 survey (Figure 8.2 in the text) , the most popular decision rules for capital budgeting used by CFOs are ________.

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

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Definitions:

Unit Product Cost

The cost calculated per unit, combining all expenses including materials, labor, and overhead related to the production.

Variable Costing

A method of accounting that comprises solely of variable production expenses, such as direct materials, direct labor, and variable manufacturing overhead, in the calculation of product costs.

Variable Costing

An accounting method that includes only variable costs (costs that change with production levels) in product costs and treats fixed costs as period expenses.

Unit Product Cost

The total cost incurred to produce, store, and sell one unit of a product, including material, labor, and overhead.