When Are Product Costs Expensed

question 12

Multiple Choice

When are product costs expensed?

• A)when the product is finished
• B)when the product unit cost is calculated
• C)when the product is sold
• D)when the product begins production

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Definitions:

IRR

Internal Rate of Return, a financial metric used to estimate the profitability of potential investments through calculating the rate of return where the net present value of all the cash flows (both positive and negative) from a project or investment equal zero.

Payback Period

A rephrased definition: The duration needed to recover the initial expenditure on an investment through the cash flows it generates.

AAR

Average annual return, indicating the mean yearly profit or loss generated by an investment over a specified period.