A Cost Driver Is Defined As: (CMA Adapted)

question 83

Multiple Choice

A cost driver is defined as: (CMA adapted)

• A)the largest cost in a manufacturing process.
• B)a fixed cost that cannot be avoided.
• C)the significant factor in developing a new product.
• D)an indirect cost that cannot be traced to a particular cost objective but is essential to the business.
• E)a causal factor that increases the total cost of a cost objective.

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Definitions:

Cash Inflows

The total amount of money received by a company or an individual, from various sources, over a period of time.

Internal Rate

Often referred to as the Internal Rate of Return (IRR), it’s the discount rate that makes the net present value (NPV) of all cash flows from a particular project equal to zero.

Investment Proposals

Formal plans or suggestions put forward for consideration or discussion, especially one concerning financial investment.

Capital Budgeting

The process of planning and evaluating investments in long-term assets, focusing on projects that will generate future profits.