Which Term Below Is Best Described as the "Decision Model

question 183

Multiple Choice

Which term below is best described as the "decision model that computes the difference between the present value of the investment's net cash inflows, using a desired rate of return, and the cost of the initial investment"?

• A) Accounting rate of return
• B) Discount rate
• C) Internal rate of return
• D) Net present value

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Definitions:

Variable Costs

Expenses that vary in relation to the quantity of products or services a company generates.

Fixed Costs

Financial obligations that are stable irrespective of the business's production or sales figures, such as rental payments, salary bills, and insurance.

Selling Price

The cost at which a service or item is made available for purchase by buyers.

Cost Behavior

Refers to how the total costs of production change when there is a change in the level of output.