In selecting among alternative courses of action, historical costs are generally not considered.

true   Correct or    falseIncorrect

 

Which of the following is virtually impossible to measure in dollars?

sunk costs   Incorrect or    qualitative factorsCorrect

 

In a outsourcing decisions only relevant variable costs should be taken into account in the analysis.

true   Incorrect or    falseCorrect

 

With special order pricing, the goal is to produce items with the highest contribution margin per sales dollar.

true   Incorrect or   falseCorrect

 

In deciding whether to delete a particular department, the most important element is an analysis of the contribution margin. If the contribution margin for a particular department is positive, the unit should not be discontinued.

correct    Incorrect or    falseCorrect

 

The contribution margin must be analyzed in terms of factors that limit its:

generation   Correct or    reductionIncorrect

 

The evaluation of programs and projects that influence the financial performance of more than a single accounting period is called:

capital budgeting   Correct or    master budgetingIncorrect

 

In evaluating a capital expenditure proposal, management should identify and evaluate the amount of an investment, the periodic returns from an investment, and which rate of return?

highest rate of return acceptable to the company   Incorrect or    lowest rate of return acceptable to the companyCorrect

 

The collective cost of funds employed by a firm is referred to as the cost of capital.

true   Correct or    falseIncorrect

 

Which interest concept considers interest computed on principal plus previously computed interest?

compound interest   Correct or    simple interestIncorrect

 

The present value of an amount to be received in the future is computed through a process called:

annuitization    Incorrect or    discountingCorrect

 

Individual present value factors may be computed from individual future value factors by computing the future value factor's:

accumulated interest   Incorrect or   reciprocalCorrect

 

The present value of an annuity is equal to the sum of the present value of the individual payments.

true    Correct or   falseIncorrect

 

The present value of an annuity to be received in years six through ten can be calculated by subtracting a certain amount from the present value factor for an annuity for periods one through ten. The amount of the subtracted factor is:

the present value factor for an annuity that covers periods one through five   Correct or    the present value factor for a single payment amount related to year fiveIncorrect

 

The net present value method requires the present value of an investment's cash inflows to be netted against the future value of the cash outflows.

true    Incorrect or    falseCorrect

 

Depreciation is ordinarily excluded from present value calculations because depreciation is of what nature?

cash    Incorrect or   noncashCorrect

 

In considering the impact of income taxes on cash flows, both revenues and expenses are likely to be affected.

true    Correct or    falseIncorrect

 

Depreciation may impact after-tax cash flows in such a way as to produce a:

tax savings   Correct or   tax costIncorrect

 

Another name for the internal rate of return computation is the:

project yield rate of return   Incorrect or    time-adjusted rate of returnCorrect

 

Which method measures the amount of time it takes to cover a project's initial cash investment?

payback method   Correct or    accounting rate of returnIncorrect