Answer true diff2 terms capitalbudgeting objective 7

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Unformatted text preview: ills 34) Cash received from the disposal of old equipment is not relevant to a decision to buy a replacement. Answer: FALSE Explanation: Cash received from the disposal of old equipment is relevant to a decision to buy a replacement. Diff: 2 Terms: capital budgeting Objective: 7 AACSB: Ethical reasoning 35) A decrease in the tax rate will decrease the net present value (NPV) for a given capital budgeting project. Answer: FALSE Explanation: A decrease in the tax rate will increase the net present value (NPV) for a given capital budgeting project. Diff: 2 Terms: capital budgeting Objective: 7 AACSB: Analytical skills 36) It is possible to use the net present value in an analysis of customer profitability. Answer: TRUE Diff: 2 Terms: capital budgeting Objective: 7 AACSB: Analytical skills 37) Using capital budgeting techniques to track and (based on success to date) modify resource levels committed to staged R&D investments is called timed options. Answer: FALSE Explanation: Using capital budgeting techniques to track and (based on success to date) modify resource levels committed to staged R&D investments is called real options. Diff: 2 Terms: capital budgeting Objective: 7 AACSB: Reflective thinking 38) The approach to incorporating inflation into the net present value method predicts cash inflows in real monetary units and uses nominal a real rate as the required rate of return. Answer: FALSE Explanation: This is the definition of Diff: 2 Terms: nominal rate of return, net present value (NPV) method, real rate of return Objective: A AACSB: Reflective thinking 39) Which of following involves significant financial investments in projects to develop new products, expand production capacity, or the remodel current production facilities? A) capital B) budgeting working capital C) master D) budgeting project-cost budgeting Answer: A Diff: 1 Terms: capital budgeting Objective: 1 AACSB: Reflective thinking 40) The accounting system that corresponds to the project dimension in capital budgeting is the: A) net present B) value method internal rate of return C) accrual D) accounting rate of return life-cycle costing Answer: D Diff: 1 Terms: capital budgeting Objective: 1 AACSB: Reflective thinking 41) The stage capital budgeting process that distinguishes which types of capital expenditure projects are necessary to accomplish of the organization objectives is the: A) identify projects stage B) make C) predictions stage obtain D) information sta...
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This note was uploaded on 09/18/2010 for the course ACCT 424 taught by Professor All during the Spring '10 term at DeVry Long Beach.

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