Which One of the Following Is a Project Acceptance Indicator

question 22

Multiple Choice

Which one of the following is a project acceptance indicator given an independent project with investing type cash flows?

• A)profitability index less than 1.0
• B)project's internal rate of return less than the required return
• C)discounted payback period greater than requirement
• D)average accounting return that is less than the internal rate of return
• E)modified internal rate of return that exceeds the required return

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Definitions:

Work in Process Inventory

Goods in various stages of production but not yet completed, representing one of the components of a manufacturing company's inventory.

Factory Overhead

All the indirect costs associated with the manufacturing process that cannot be directly tied to a specific product, including costs related to the factory itself such as utilities, depreciation, and maintenance.

Direct Labor Costs

Expenses that are directly associated with the manufacturing of a product or the delivery of a service, such as wages of workers on the production line.

Factory Overhead

Indirect manufacturing costs not directly tied to individual products, encompassing expenses like factory rent, utilities, and equipment depreciation.