Which of the Following Decision Rules Is Best Defined as the Amount

question 55

Multiple Choice

Which of the following decision rules is best defined as the amount of time it takes to pay back the initial investment?

• A) internal rate of return (IRR)
• B) profitability index
• C) net present value (NPV)
• D) payback period

---

Definitions:

Overhead Costs

Indirect costs incurred in the business process, such as rent, utilities, and administrative expenses, not directly attributable to specific products or services.

Complex

Consisting of many different and connected parts; not simple.

Plantwide Overhead Rate

A single, uniform overhead absorption rate used throughout a manufacturing plant or facility.

Allocation Base

A criterion or standard used to distribute costs among different cost objects, often used in the process of overhead allocation.