The Payback and Accounting Rate of Return Methods Are Often

question 9

True/False

The payback and accounting rate of return methods are often used to perform an initial screening of investments.

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Definitions:

Resource Demand

The demand for inputs necessary for the production of goods and services.

MRP

MRP, or Marginal Revenue Product, quantifies the added value generated by employing an additional unit of input in the production process.

Haircut

A reduction applied to the value of an asset for purposes of calculating capital requirements, margining, or risk assessment.

Marginal Revenue Product

The extra income produced by employing an additional unit of a production resource.