The Decision with the Highest NPV (Net Present Value)will Provide

question 55

Multiple Choice

The decision with the highest NPV (net present value) will provide a supply chain with

• A)the highest financial return.
• B)the lowest financial return.
• C)a reasonable financial return.
• D)the least desirable financial return.

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Definitions:

Break-even Point

The Break-even Point is the level of production or sales at which the total revenue generated equals the total costs, indicating no profit or loss.

Target Profit

The specific amount of net income that a company aims to achieve within a certain time frame.

Absorption Costing

An accounting method that includes all manufacturing costs (direct materials, direct labor, and overhead) in the cost of a product.

Manufacturing Costs

The total expense incurred in the process of producing a product, which includes direct labor, direct materials, and overhead costs.