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Essay Questions
47. Auto engines have become more complex over the past twenty years, partly as a result of
environmental concerns about exhaust contamina

8.
Definitely. The damage to Porsches reputation is definitely a factor the company needed
to consider. If the reputation was damaged, the company would have lost sales of its
existing car lines.
9.
One company may be able to produce at lower incremental

Chapter 12 - Principles of Bond Valuation and Investment
Tax swap
19. Mr. Conrad bought $10,000 in bonds six months ago. The 10-year bonds were purchased
at par with a 10 percent coupon rate. Now interest rates in the market are 13 percent for
similar obl

Deep discount bond
18. Assume an investor is trying to choose between purchasing a deep discount bond
or a par value bond. The deep discount bond pays 6 percent interest, has 20 years to
maturity, and is currently trading at $656.80 with a 10 percent yiel

MCQ. Kind of advantage gained by offering greater value to customers as compared to competitors is
classified as
A. competitive advantage
B. corporate advantage
C. branding advantage
D. premium advantage
Answer A
MCQ. Company whose strategies are based on

MCQ. An organization ability to offer market offerings at lower prices in comparison with its
competitors is classified as
inelastic demand
product differentiation
cost leadership
elastic demand
Answer C
MCQ. Balanced scorecard perspective focuses on all

The correct answer for each question is indicated by a
.
1
CORRECT
Variable costing is also known as:
A)Direct costing.
B)Indirect costing.
C)Marginal costing.
D)Both (A) and (C).
Feedback:
The correct answer is D (Learning Objective 1):
Variable costing

02
Student: _
1.
Which of the following statements is false?
i. Qualitative information is not relevant for planning purposes.
ii. Production costs are important for planning purposes, but selling and administration costs are not.
iii. Information on reve

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SAMPLE C
To Whom It May Concern:
*
The Cambridge A Level (CAL) Programme is a one and a half-year full-time course of study and it is equivalent to a
Year 12 qualification. Students join the programme after completing SPM, the Malaysian equivalent of the

SAMPLE B
To Whom It May Concern:
*
The Cambridge A Level (CAL) Programme is a one and a half-year full-time course of study and it is equivalent to a
Year 12 qualification. Students join the programme after completing SPM, the Malaysian equivalent of the

The bad; is packed in Natran and left
fer T0 days.
After that, the bady is wrapped in linen
with tree resin far glue.
Hatran : A drying agent made at salt

Feedback from University of Leicester
admission tutors
It may seem like an obvious point to make, but
many references are plain and generic and could
have been written about anyone. I have also
seen the occasional one where the teacher has
forgotten to ch

CAMBRIDGE INTERNATIONAL EXAMINATIONS
Compiled by
Imran Mirza
MSc Physics, PGCC,
Scoland, Uk
Planning
Analysis
And
Evaluation
A-level Physics
This booklet covers CIE A Level Physics Paper 5
By Imran Mirza
2009-2011
Exam tips for Planning, Analysis and Eval

Why write a good testimonial
It affirms the worth of the student
It is a powerful tool in the marketplace
It helps distinguish the student from the rest of the pack
It will give him an edge over others in the selection process to
the university of his cho

SAMPLE A
To Whom It May Concern:
The Cambridge A Level (CAL) Programme is a one and a half-year full-time course of study and it is equivalent to a
Year 12 qualification. Students join the programme after completing SPM, the Malaysian equivalent of the OL

Use of bond table
14. An investor places $800,000 in 30-year bonds (12 percent coupon rate), and
interest rates decline by 3 percent. Use Table 124 to determine the current value of
the portfolio.
12-14.
$ 800, 000
30.96%
$ 247, 680
$ 800, 000
247, 680
$

Use of bond table
4. Using Table 123, determine the price of a
a. 10 percent coupon rate bond, with 20 years to maturity and a 14
percent yield to maturity.
b. 12 percent coupon rate bond with 10 years to maturity and an 8
percent yield to maturity.
12-4.

PROBLEMS
Bond price
1. Given a 10-year bond that sold for $1,000 with a 13 percent coupon
rate, what would be the price of the bond if interest rates in the
marketplace on similar bonds are now 10 percent? Interest is paid
semiannually. Assume a 10-year t

1.
If the equipment will be replaced at the end of its useful life, the correct capital
budgetingtechniqueisEAC.UsingtheNPVswecalculatedinthepreviousproblem,the
EACforeachsystemis:
EACA=$540,409.53/(PVIFA20%,4)
EACA=$208,754.32
EACB=$613,826.32/(PVIFA20%,

Yield to call
12. a. Using the facts given in problem 11,
what would be the yield to call if the call can
be made in four years at a price of $1,080?
Use Formula 123.
b. Explain why the answer is lower in part a
than in problem 11.
c. Given a call value o

Approximate yield to maturity
11. What is the approximate yield to
maturity of a 14 percent coupon rate, $1,000
par value bond priced at $1,160 if it has 16
years to maturity? Use Formula 122.
12-11.
y'
Par Value (Pn ) Market value (V)
Number of periods

1. Given a 10-year bond that sold for $1,000
with a 13 percent coupon rate, what would
be the price of the bond if interest rates in
the marketplace on similar bonds are now 10
percent? Interest is paid semiannually.
Assume a 10-year time period.
12-1. PV

Comparison of yields
9. What is the current yield in problem 8?
Why is it slightly higher than the yield to
maturity?
12-9. $100/$1,090.90 = 9.17%
It is higher than yield to maturity because it
does not take into consideration the fact that
the bond price

Anticipated realized yield
13. a. Using the facts given in problem 11,
what would be the anticipated realized yield
if the forecast is that the bond can be sold in
three years for $1,280? Use Formula 124.
Continue to assume the bond has a 14
percent coupo

Yield to maturity
8. What is the yield to maturity for a 10 percent coupon rate bond priced
at $1,090.90? Assume there are 20 years left to maturity. It is a $1,000
par value bond. Use the trial-and-error approach with annual analysis.
(Hint: Because the

Approximate yield to maturity
11. What is the approximate yield to maturity of a 14 percent coupon
rate, $1,000 par value bond priced at $1,160 if it has 16 years to
maturity? Use Formula 122.
12-11.
y'
Par Value (Pn ) Market value (V)
Number of periods

7.
What are the purposes of credit scoring models? How could these models
possibly assist an FI manager to better administer credit?
Credit scoring models are used to calculate the probability of default or to sort
borrowers into different default risk cl

.
The forward rate, f, for the period 93 days to 175 days, or 82 days, for the
Treasury
Theis:
probability of repayment of the A-rated
93-day A-rated
bond for
bond
the period
is:
93 days to 175
days, p(1
p, is:+ 0.0842)93/365 = (1 + 0.0807)93/365
p = 99.

Use of bond table
4. Using Table 123, determine the price of a
a. 10 percent coupon rate bond, with 20
years to maturity and a 14 percent yield to
maturity.
b. 12 percent coupon rate bond with 10 years
to maturity and an 8 percent yield to
maturity.
12-4.