Explanation

ROI (Return On Investment) is a financial metric that calculates the return or profit generated by an investment.

It expressed as a percentage of the original investment amount.

It helps evaluate the performance and profitability of an investment or project.

Explanation

The future value of an investment is determined by the principal amount, interest rate, and time period.

But inflation rate is not a direct factor in the calculation.

Explanation

A higher NPV indicates higher profitability.

It means that the project is expected to generate more value or returns than its costs.

This making it a more attractive investment opportunity.

Explanation

An NPV greater than zero indicates a profit.

It means that the investment is expected to generate value and return more than the initial investment.

This suggests that the investment is viable and should be pursued.

Explanation

IRR considers time value of money, unlike Payback Period.

IRR discounts cash flows to present value, making it a more comprehensive measure.

Explanation

As a manufacturer, the cost of raw materials is a direct cost of producing goods.

It is included in the calculation of COGS (Cost of Goods Sold).

Explanation

COGS (Cost of Goods Sold) includes costs directly related to production, such as:

• Direct materials
• Direct labor
• Overhead costs (including depreciation of manufacturing equipment)

Explanation

Tax rate does not affect IRR.

As IRR is a pre-tax measure of a project's profitability.

Explanation

The basic formula for profit is: Revenue - Expenses

Profit = Revenue - Expenses

Explanation

The closest option is $1,500.00.