A Proposed Project Should Be Accepted If the Net Present

question 51

Multiple Choice

A proposed project should be accepted if the net present value is

• A)positive.
• B)negative.
• C)larger than the internal rate of return.
• D)smaller than the internal rate of return.

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Definitions:

Actual Materials Purchased

The total quantity and cost of raw materials bought by a company for production during a specific period.

Standard Price

A predetermined cost assigned to materials, labor, and overhead for budgeting and cost-control purposes.

Actual Cost

The true financial expenditure required to produce a product or service, as opposed to budgeted or standard costs.

Labour Rate Variance

The difference between the actual cost of direct labor and the standard cost of direct labor multiplied by the actual hours worked.