Indicate Whether Each of the Following Statements Is True or False

question 43

Short Answer

Indicate whether each of the following statements is true or false.
The net present value method provides a direct measure of the rate of return to be expected from a capital investment project.______
Managers who want to know the rate of return to expect from a capital investment project should calculate the net present value.______
The internal rate of return for a capital investment is the rate that would produce a net present value of zero.______
For a capital investment project to be acceptable,the internal rate of return should be higher than the hurdle rate.______
A capital investment project that has a positive net present value may have an internal rate of return that is lower than the hurdle or required rate of return.______

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Definitions:

Variable Manufacturing Overhead Standards

Pre-established rates or quantities that are used to assign variable overhead costs to products based on levels of activity such as labor or machine hours.

Variable Overhead Rate Variance

The variance between the actual variable overhead costs that were incurred and the anticipated variable overhead calculated according to the real amount of activity.

Supplies Cost

The expense incurred to acquire supplies necessary for the production of goods or the operation of a business.

Variable Overhead Efficiency Variance

The difference between the actual variable overhead costs incurred and the expected variable overhead costs based on standard cost accounting practices.