ACC questions - of accounting income (or reduction in...

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1.) Since it is based on cash flows, the discounted cash flow (DCF) method of valuation has the added advantage that is not subject to the bias of different: A.) Discount rates B.) Internal Rates of return C.) Monetary systems D.) Accounting policies for determining total assets and net income 2.) One of the behavioral problems with relevant cost analysis is the overemphasis on: a.) Short-term goals b.) Unit-fixed costs c.) Opportunity costs d.) Long-term strategic goals 3.) Wild West fashion expects the total cost of goods sold to be $30,000 in November and $60,000 in December for one of its young adult suits. Management also wants to have on hand at the end of each month 10 percent of the expected total cost of sales for the following month. What dollar amount of suits should be purchased in November? 4.) Which of the following statements regarding capital investment analysis is false? a.) A long-term planning horizon is assumed b.) Benefits of potential investment projects are conceptually expressed in terms
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Unformatted text preview: of accounting income (or reduction in costs) c.) Project acceptance decisions are based on models that explicitly incorporate the time value of money d.) Need to incorporate income-tax effects in the analysis, for both revenues (gains) as well as expenses (losses) e.) Discounted cash flow (DCF) decision models are used by a majority of large organizations 5.) Given the same total cash flow returns (CFRs) the internal rate of return (IRR) method of capital budgeting would favor a proposal having yearly CFRs that were: a.) Even b.) Uneven c.) Heavier towards the end of a proposal’s life d.) Heavier towards the beginning of a proposal’s life e.) Heavier towards the middle of a proposal’s life 6.) When using relevant cost analysis, it’s a common mistake for untrained managers to include in their analysis all of the following except: A.) Sunk costs B.) Allocated fixed costs C.) Average fixed costs D.) Unit variable costs...
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This note was uploaded on 07/11/2011 for the course ACC 601 taught by Professor Corke during the Summer '11 term at Niagara University.

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ACC questions - of accounting income (or reduction in...

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