Use the Table for the Question(s) Below

question 108

Multiple Choice

Use the table for the question(s) below.
Consider the following list of projects:

-Assuming that your capital is constrained, which investment tool should you use to determine the correct investment decisions?

• A) profitability Index
• B) incremental IRR
• C) net present value (NP
• D) internal rate of return (IR

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Definitions:

Customer Margin

The profit derived from serving a particular customer, calculated as sales revenue minus the costs of servicing that customer.

Serving Customers

The process or actions taken to provide goods or services to customers in a way that meets or exceeds their expectations.

Activity-Based Costing

A costing methodology that assigns overhead and indirect costs to specific activities and then to products or services based on their consumption of those activities.

Machine-Hours

A measure of the amount of time machines are run in the production process, often used as a basis for allocating manufacturing overhead costs.