The project's expected monetary loss or gain by discounting all cash outflows and inflows, using required rate of return is classified as _________?
Correct answer: A. net present value
- A. net present value
- B. net future value
- C. net discounted value
- D. net recorded cash value
Explanation
NPV is the present value of all expected cash inflows minus the present value of all expected cash outflows, using the required rate of return. It therefore captures the project’s discounted net gain or loss.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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