Which of the Following Are Present Value Methods of Analyzing

question 52

Multiple Choice

Which of the following are present value methods of analyzing capital investment proposals?

• A) Internal rate of return and average rate of return
• B) Average rate of return and net present value
• C) Net present value and internal rate of return
• D) Net present value and payback

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Definitions:

Formula

A mathematical relation or rule expressed in symbols.

Average Total Cost

The total cost divided by the number of units produced, representing the cost per unit.

Average Variable Cost

The cost per unit of output that varies with the level of production, typically including labor and material costs.

Marginal Cost

The cost added by producing one additional unit of a product or service.