≡ MENU
MCQs
Papers
Definitions
Flashcards
MCQs
Papers
Definitions
Flashcards
Categories
International Marketing
Absorption Costing
ACAMS Practice Questions
Accounting Basics
Accounting Cycle and Classifying Accounts
Accounting Final
Accounting For Managers
Accounting for Merchandising Activities
Accounting for Pensions
Accounting Information Systems
Accounting Principles
Accounts Receivables
Acquisition
Activity Based Costing
Adjusting Accounts for Financial Statements
Advanced Business Economics
Advertising and Public Relations
Advertising and Sales Promotion
Agency
An Overview of International Business
Analysis and Forecasting Techniques
Analyzing and Recording Transactions
Arithmetic
Asset Demand and Supply under Uncertainty
Audit
Auditing and Attestation
Bankruptcy
Behavioral and Allied Sciences
Bonds and Long Term Notes Payable
Brand Management
Budgeting
Business
Business Analytics
Business Analytics & Technology Management Chapter 2
Business Analytics & Technology Management Chapter 3
Business Analytics & Technology Management Chapter 4
Business Analytics & Technology Management Chapter 5
Business Analytics & Technology Management Chapter 6
Business and Company Law
Business Communication
Business Cycles
Business Economics
Business Environment
Business Essentials
Business Ethics and Governance
Business Ethics Exam
Business Law
Business Law Study guide
Business Mathematics
Business Organisations and Environment
Business organization and systems
Business Process Performance
Business Statistics
Business Strategy
Business Structure
Business Studies
California Real Estate
Capital Assets
Capital Budgeting
Capital Budgeting and Managerial Decisions
Capital Structure
Cash Management
Changes in Accounting Principles
Changing Marketing Environment
Conflict Theory
Consolidated Financial Statements
Consumer Behavior
Contingency
Contracts
Controlling
Corporate and Business Law
Corporate Finance
Corporate Governance
Corporate Law
Corporate Taxation
Corporation
Cost Accounting Final exam
Cost Accumulation Systems
Cost Allocation Techniques
Cost and Managerial Accounting
Cost Behavior
Cost Management
Cost Measurement
Cost of Capital
Cost Terms and Classifications
Cost Volume Profit Analysis
Currency Exchange Rates
Current Assets
Current Liabilities
Customer Relationships and Value
CVP Analysis and Marginal Analysis
Debt and Bankruptcy
Decision Makers
Decision Makers Household Sector
Decision Making
Deferred Tax
Demand for Money
Depreciation
Derivative Instruments and Hedging Activities
Dividend Policy
Dividends, Shares, and Income
E Business
Economics
Employee Training and Development
Entrepreneurship
Environments of Business
Error Correction
Essence of Management
Ethical and Professional Standards
Ethics and Social Responsibility
Ethics for Management Accountants
External Financial Statements and Revenue Recognition
Federal Securities Acts
Finance
Financial Accounting
Financial and the Nonfinancial Sectors
Financial Decision Making
Financial Instruments
Financial Instruments
Financial Intermediaries and Financial Markets
Financial Management
Financial Markets and Securities Offerings
Financial Reporting
Financial Statements
Financial Statements and Accounting Transactions
Fixed Assets
Flexible Budgets and Standard Costs
Florida Real Estate MCQs
Fraud Internal Control and Cash
Fundamental Accounting Principles
Global Finance
Global Marketing and World Trade
Governmental Accounting State and Local
Health and Life Comprehensive Exam
Health and Life Practice Questions
Health Insurance
Hedging Instruments
HR Management
HRM
Human Resource Management
Human Resource Management HRM
Human Resource Planning
Importance of Business Economics
Income Tax
Individual Taxation
Information Technology
Insurance
Insurance and Risk Management
Insurance License Texas Life and Health
Intangible Asset
Integrated Marketing Communications and Direct Marketing
Interactive Marketing and Electronic Commerce
Internal Auditing and Systems Controls
Internal Control and Cash
International Business
International Trade
Interpersonal and Organizational Communication
Introduction to Business
Introduction to Human Resource Management
Introduction to Human Resources Assessment
Inventory Management
Investment
Investment Risk and Portfolio Management
Job Order Costing
Leading
Lease
Legal Management
Life and Health Insurance
Life Insurance
Life Insurance Basics
Life Insurance Policies
Life Insurance Policy
Long Term Investment
Long Term Securities
Management
Management and Cost Accounting
Management Science
Managerial Accounting
Managerial Accounting Concepts and Principles
Managing Organizational Change
Managing Production and Operations
Managing Products and Brands
Managing Services
Market Segmentation Targeting and Positioning
Marketing
Marketing and Corporate Strategies
Marketing Channels and Wholesaling
Marketing Management
Master Budgets and Planning
Merger
Mergers and Acquisitions
Microsoft Excel
Money and Banking
mortgage
National Health Insurance
Not For Profit Accounting
Operations Management
Organization and Operation of Corporations
Organization Effectiveness
Organizational Behavior
Organizational Behavior Essentials
Organizational Markets and Buyer Behaviour
Organizational Structure and Design
Partnership Taxation
Partnerships
Payroll Liabilities
Performance Management
Personal Selling and Sales Management
Planning
Present Value
Pricing
Principles and Practices of Management
Probability Analysis
Process Costing
Production and Operations Management
Professional Practice
Professional Responsibilities
Profit Planning
Profitability Analysis and Analytical Issues
Profitability Analysis and Decentralization
Project Management
Property
Property Plant and Equipment
Property Plant and Equipment Exam
Ratio Analysis
Real Estate
Receivables
Reporting and Analyzing Cash Flows
Reporting and Analyzing Receivables
Responsibility Accounting and Performance Measures
Retailing
Revenue Recognition
Risk and Procedures for Control
Sales
SAP
Secured Transactions
Service Department Costing
Short Term Financing
Short Term Investment
Standard Costs and Variance Analysis
State Health Insurance
Statement of Cash Flow
Statement of Comprehensive Income
Statement of Financial Position
Statistics
Stock Market and Stock Prices
Stockholders Equity
Strategic Marketing Process
Strategic Planning
Strategy
Structure of Interest Rates
Supply Chain and Logistics Management
System Analysis and Design
Systems Controls
Tax Law
Taxation
Texas Real Estate
The Management Challenge
Total Quality Management
Transfer Pricing
Understanding Exchange Rates
Understanding Interest Rates
Understanding Interest Rates Determinants
Variable Costing
Working Capital
Home
—›
Capital Budgeting and Managerial Decisions
Capital Budgeting and Managerial Decisions MCQs
?
The cost of a new machine is $24,000. The machine has a 5-year service life and no salvage. The annual cash flow will be 15% of the cost of the machin...
in 6.7 years
in 15.0 years
in 1.5 years
after the machine’s service life has expired
?
Equipment will be purchased at a cost of $30,000. It will have no salvage value. The cash flows are expected to be: $12,000, $10,000, $15,000, and $8,...
3.1 years
4.0 years
2.50 years
2.53 years
?
The company expects an after-tax income of $2,400 per year over the life of an investment that will cost $25,000, has a 5-year service life, and has n...
19.2%
9.2%
10.4%
9.6%
?
Which is not true of the net present value method of determining the acceptability of an investment?
Net cash flows from the investment are estimated
The net cash flows are discounted at an acceptable rate of return
The initial cost of the investment is added to the net cash flows
A positive net present value of the cash flows is required
?
Each of the three projects cost $20,000, the amount available for investment. Each project has a service life of 3 years and no salvage value. The inv...
Project A
Project B
Project C
none of the projects
?
When selecting an earnings rate to use in evaluating projects under the net present value method, a company will consider a rate that:
is equal to the current interest rate to borrow money
is equal to the current rate of return on assets
is equal to the current tax rate
exceeds the current interest rate to borrow money
?
Which line of the following schedule is incorrect?
Payback period Basis of Measurement: Cash Flows Measure Expressed As: Number of Years
Net Present value Basis of Measurement: Cash Flows Measure Expressed As: Dollar Amount
Internal rate of return Basis of Measurement: Accrual Income Measure Expressed As: Percent
Accounting rate of return Basis of Measurement: Accrual Income Measure Expressed As: Percent
?
Which of the following is incorrect?
Payback period Basis of Measurement: Cash Flows Measure Expressed As: Number of Years
Net Present value Basis of Measurement: Cash Flows Measure Expressed As: Percent
Internal rate of return Basis of Measurement: Cash Flows Measure Expressed As: Percent
Accounting rate of return Basis of Measurement: Accrual Income Measure Expressed As: Percent
?
An additional cost that results from a particular course of action is known as a(an):
sunk cost
opportunity cost
incremental cost
net present cost
?
A cost incurred as a consequence of a past irrevocable decision and that, therefore, cannot be avoided, is known as a:
decremental cost
differential cost
sunk cost
opportunity cost
?
Which of the following is not a relevant cost in decision making? a. b. c. d.
Opportunity cost
Relevant benefits
Avoidable costs
Sunk costs
?
The cost to produce 8,000 units at 70% capacity is: Direct materials: $16,000 Direct labour: $8,000 Factory overhead, all fixed: $12,000 Selling e...
$8.90
$7.80
$7.40
$7.00
?
Given the following list of costs, which one should be ignored in a decision to produce additional units of product for a factory that is operating at...
Fixed administrative expenses
Variable factory overhead
Per hour cost of direct labour
Variable selling expenses
?
Henny-Penny has 8,000 defective units of a product that cost $4 per unit to manufacture, and can be sold for $2 per unit. These units can be reworked ...
$ 24,000
$ 8,000
$(24,000
$ 48,000
?
Henny-Penny has 8,000 defective units of a product that cost $3 per unit to manufacture, and can be sold for $1 per unit. These units can be reworked ...
$24,000
$(8,000)
$16,000
$ 8,000
?
Sales of 50,000 units at $4 per unit are made monthly. The unit cost is $1.50. Incremental costs of $1 per unit to further process the units will resu...
Do further processing and sell the units at $4.75
Sell the units at the current stage of completion (50,000 @ $4)
Do further processing on only one-half of the units
Commit its resources to a different product
?
Product A sells for $8 per unit. Its variable cost per unit is $5. Product B sells for $12 per unit. Its variable cost per unit is $8. The plant capac...
200,000 units of Product A, 100,000 units of Product B
100,000 units of Product A, 200,000 units of Product B
150,000 units of Product A, 150,000 units of Product B
No units of Product A, 300,000 units of Product B
?
Segment Auburn generates total sales of $52,000, its direct expenses are $11,000, and its indirect expenses are $13,000. Its cost of goods sold is $32...
The company will lose $13,000 if Segment Auburn is eliminated.
Segment Auburn’s revenue is greater than its avoidable costs.
Segment Auburn is a candidate for elimination.
Segment Auburn’s unavoidable costs are greater than avoidable costs.
?
The following incomplete information is provided for investment decisions. .tg {border-collapse:collapse;border-spacing:0;} .tg td{border-color:b...
be recovered at the end of year 2
not be recovered in three years
be recovered in 2.27 years
be recovered in 2.73 years
?
An investment project for which the net present value is $300 would result in which of the following conclusions?
The net present value is too small; the project should be rejected.
The investment project promises slightly more than the required rate of return.
The net present value method is not suitable for evaluating this project; the time-adjusted rate of return method should thus be employed in analyzing this project.
The investment project should only be accepted if net present value is zero; a positive net present value indicates an error(s) in the estimates associated with the analysis of this investment.
?
Working capital required for an investment project would be considered as:
a cash outflow at the inception of the project with no discounting required.
a cash inflow at the end of the term of the investment project when working capital is released, discounted back to the inception of the project at the appropriate rate.
both a cash outflow at the inception of the project and a cash inflow at the end of the term of an investment project resulting in an offsetting of two equal amounts that has no effect on the net present value analysis.
described in both item a and item b above.
?
The net present value method:
makes no allowance for recovery of the original investment.
requires the deduction of amortization in order to provide for the recovery of the original investment.
provides for recovery of the original investment since each inflow is allocated between a return of principal and interest.
only makes allowance for return on the investment.
?
The evaluation of an investment having uneven cash flows using the payback method:
cannot be done.
can be done only by matching cash inflows and investment outflows on a year-by-year basis.
will produce essentially the same results as those obtained through the use of discounted cash flow techniques.
requires the use of a sophisticated calculator or computer software.
?
In which of the following situations would a project be acceptable under the internal rate of return method? 1. The internal rate of return is equal t...
Only 1.
Only 3.
Both 1 and 3.
Both 1 and 2.
?
Anthony operates a part time auto repair service. He estimates that a new diagnostic computer system will result in increased cash inflows of $1,500 i...
$4,599.
$5,502.
$5,638.
$5,107.
?
Which of the following capital budgeting techniques implicitly assumes that the cash flows are reinvested at the company’s minimum required rate of ...
Yes/Yes
Yes/No
No/Yes
No/No
?
Billy Bob,Inc. has gathered the following data on a proposed investment project: Investment in amortizable equipment, $150,000; Annual cash flows, $ 4...
0.27 years.
3.75 years.
10.00 years.
2.13 years.
?
Billy Bob,Inc. has gathered the following data on a proposed investment project: Investment in amortizable equipment, $150,000; Annual cash flows, $ 4...
26.67%.
16.67%.
36.67%.
10.00%.
?
Which of the following statements is accurate regarding the ranking of projects using the net present value method?
Projects can never be ranked using the net present value method.
The net present value of one project cannot be compared directly to the net present value of another project unless the investments in the projects are of equal size.
The net present value of one project can be compared directly to the net present value of another project even when the investments in the projects are not of equal size.
All projects, regardless of size, can be ranked using the net present value method.
