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Question 1. 1. (TCO 1) Which one of the following is not a benefit of budgeting




Question;Question 1. 1. (TCO 1) Which one of the following is not a benefit of budgeting? (Points: 5)It facilitates the coordination of activities.It provides definite objectives for evaluating performance.It provides assurance that the company will achieve its objectives.It provides early warning signs of potential threats.Question 2. 2. (TCO 2) Which of the following is not a qualitative forecasting method? (Points: 5)Executive opinionsSales force pollingDelphi methodClassical decompositionQuestion 3. 3. (TCO 3) Which of the following is not used to evaluate the accuracy of regression results? (Points: 5)Mean absolute deviationCoefficient of determinationPrediction confidence intervalT-statisticQuestion 4. 4. (TCO 4) Which of the following statements regarding the risk associated with R & D activities is incorrect? (Points: 5)The amount of time between the R & D activity and the cash flows from the project does not affect risk.Greater risk is associated with creating new products than with improving existing products.Risk increases as the time between the R & D activity and the cash flows from the project increases.Assessing risk is a vital part of research and development.Question 5. 5. (TCO 5) Which of the following is true when ranking proposals using zero-base budgeting? (Points: 5)Nonfunded packages should not be ranked.Adjustments are not allowed once the ranking is complete.Due to changing circumstances, a low-priority item may later become a high-priority item.Decision packages are ranked in order of increasing benefit.Question 6. 6. (TCO 6) When using the payback period technique, the payback period is expressed in terms of _____.(Points: 5)a percentagedollarsyearsmonthsQuestion 7. 7. (TCO 6) The accounting rate of return method is based on _____.(Points: 5)income datathe time value of money datamarket valuescash flow dataQuestion 8. 8. (TCO 6) A company projects annual cash inflows of $85,000 each year for the next 5 years if it invests $300,000 in new equipment. The equipment has a 5-year life and an estimated salvage value of $75,000. What is the accounting rate of return on this investment? (Points: 5)28.3%13.3%15%43.3%Question 9. 9. (TCO 6) Bradshaw Inc. is contemplating a capital investment of $85,000. The cash inflows over the project?s 4 years are as follows.Year Expected Cash Inflow1 $18,0002 $25,0003 $35,0004 $20,000The payback period is _____.(Points: 5)2.17 years3.35 years2.30 years3.47 yearsQuestion 10. 10. (TCO 6) Selma Inc. is comparing several alternative capital budgeting projects as shown below.Projects A B CInitial Investment $40,000 $60,000 $80,000Present value of cash inflows $60,000 $55,000 $100,000Using the profitability index, rank the projects, starting with the most attractive. (Points: 5)A, C, BA, B, CC, A, BC, B, AQuestion 11. 11. (TCO 6) A company has a minimum required rate of return of 10%. It is considering investing in a project that costs $210,000 and is expected to generate cash inflows of $85,000 at the end of each year for 4 years. The approximate net present value of this project is _____.(Points: 5)$59,442$1,387$65,375$5,161Question 12. 12. (TCO 7) Which of the following would not appear as a fixed expense on a selling and administrative expense budget? (Points: 5)Freight-outOffice salariesProperty taxesDepreciationQuestion 13. 13. (TCO 7) Sargent.Com plans to sell 2,000 purple lawn chairs during May, 1,900 in June, and 2,000 during July. The company keeps 15% of the next month?s sales as ending inventory. How many units should Sargent.Com produce during June? (Points: 5)1,9152,2001,885Not enough information to determineQuestion 14. 14. (TCO 8) Which of the following is not a cause of profit variance? (Points: 5)Changes in sales priceChanges in sales mixChanges in sales volumeAll of the above are causes of profit variance.Question 15. 15. (TCO 9) A static budget _____.(Points: 5)should not be prepared in a companyis useful in evaluating a manager's performance by comparing actual variable costs and planned variable costsshows planned results at the original budgeted activity levelis changed only if the actual level of activity is different from what is originally budgetedQuestion 16. 16. (TCO 9) If costs are not responsive to changes in activity level, how are they best described? (Points: 5)MixedFlexibleVariableFixedQuestion 17. 17. (TCO 9) At the high level of activity in November, 7,000 machine hours were run and power costs were $12,000. In April, a month of low activity, 2,000 machine hours were run and power costs amounted to $6,000. Using the high-low method, what is the estimated fixed cost element of power costs? (Points: 5)$12,000$6,000$3,600$8,400


Paper#38354 | Written in 18-Jul-2015

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