1) Which of the following capital investment analysis methods does not use the present value of money? Select one: A

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1) Which of the following capital investment analysis methods does not use the present value of money?

Select one:

A. Cash payback

B. Internal rate of return

C. Net present value

D. Return on asset

 

2.) Which of the following is an annuity?

Select one:

A. Cash sales

B. Bond interest payments

C. Fixed asset purchase

D. None of the above

 

3.) A series of equal net cash flows at fixed intervals is called a(an):

Select one:

A. Annuity

B. Present value

C. Future value

D. None of the above

 

4.) The normal selling price is equal to the cost amount per unit minus markup. 

Select one:

True

False

 

5.) A differential income indicates that a decision is expected to decrease income. 

Select one:

True

False

 

6.) The present value of an amount is equal to the value today of an amount to be received in the future.

Select one:

True

False

 

7.) When the net present value is positive, the present value index is less than 1.

Select one:

True

False

 

8.) In a cost variance analysis, if actual cost is more than budgeted cost, then the variance is favorable.

Select one:

True

False

 

9.) For an investment with an initial of $200,000 and net present value of cash flow of $202,900, the present value index is less than 1.

Select one:

True

False

 

10.) When analyzing costs, if actual costs are higher than standard costs, the variance is favorable.

Select one:

True

False

 

11.) In setting up a product normal selling price, only the cost of manufacturing the product (product costs) are included in the cost per unit. 

Select one:

True

False

 

12.) Setting up a product selling price involves estimating the product cost per unit and a markup. 

Select one:

True

False

 

13.) The Present Value Index is the amount to be invested divided by the present value of the net cash flow.  

Select one:

True

False

 

14.) An investment is considered good if the present value index is greater than 1. 

Select one:

True

False

 

15.) The Average rate of return is a capital investment analysis method that uses present values. 

Select one:

True

False

 

16.) A company should always discontinue a non profiting business segment without conducting any differential analysis. 

Select one:

True

False

 

17.) Consider the followings:

Actual labor hours: 6,000

Actual rate: $5/hr

Standard labor hours: 5,500

Standard rate: $5.50/hr

Determine the direct labor time variance

Select one:

A. $2,750 favorable

B. $4,500 favorable

C. $2,750 unfavorable

D. $3,750 unfavorable