Which of the Following Project Evaluation Methods Focuses on Accounting

question 88

Multiple Choice

Which of the following project evaluation methods focuses on accounting income rather than cash flows?

• A) Net present value.
• B) Accounting rate of return.
• C) Internal rate of return.
• D) Payback period.
• E) None of the other answers are correct.

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Definitions:

Direct Labor Variances

The differences between the budgeted and actual costs of direct labor, analyzed to understand deviations in manufacturing expenses.

Variable Overhead Cost

Those expenses of operating a business that vary with the level of output or production activity, such as utilities for manufacturing equipment.

Maintenance Costs

Expenses incurred in the upkeep of machinery, buildings, and equipment to ensure efficient operation and prevent breakdowns.

Machine-Hours

A measurement unit representing the amount of work a machine can perform in one hour, often used in manufacturing to allocate costs based on machine usage.