Figure 3 Assume the Division's Current ROI Is 10 Percent and the and the Firm's

question 28

Multiple Choice

Figure 3
Assume the division's current ROI is 10 percent and the firm's minimum required rate of return is 6 percent.
-Refer to Figure 3. If you were the division manager and you were evaluated based on ROI, which projects would you accept?

• A) Projects A, B, and C
• B) Projects A and B
• C) Projects B and C
• D) Project B only

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Definitions:

Activity-Based Costing

A costing methodology that assigns costs to products based on the amount of resources used for specific activities, such as manufacturing or selling.

Direct Labor-Hours

The total hours worked by employees directly involved in the manufacturing process of a product.

Activity-Based Costing

A costing method that assigns overhead and indirect costs to specific activities, enhancing cost precision.

Overhead Cost

Indirect costs of business operations, such as lighting, rent, and administrative salaries, not directly tied to a specific product or service.