1. when using the internal rate of return method to evaluate capital spending on a new project, the project will be accepted if the internal rate of return is equal to or greater than
a. the markup percentage on merchandise if the business is a merchandising business
b. management's required rate of return on the project
c. the rate of return on net sales
d. the gross margin percentage if the business is a merchandising business
2. which of the floowing is not capital budgeting decision?
a.buying office supplies
b. buying land
c.purchasing another company
d. building a manufacturing plant
3. compound interest is the return on
a.principal minus interest earned
b. principal only
c. principal plus interest earned
d. interest earned only
4. to compute the present value of an annuity, you must know
a. only the discount rate and the number of discount periods
b. only the discount rate and the amount of the periodic receipts
c. only the number of discount periods and the amount of the periodic receits
d. the discount rate, the number of discount eriods, and the amount of the periodic receipts
5.if you want to have $150,000 at the end of 14 years, and you know you can get 6% interest, what amount do you need to invest now?
6. if you invest $18,000 each year for 16 years at 8% interest, at the end of 16 years you will have
7.managers are evaluated on cost control
a. using flexible budget date for the actual level of output and noncontrollable costs.
b. using static budget date and noncontrollable costs
c. using flexible budget date for the actual level of output and controllable costs.
d. using static budget date and controllable costs.
8. An unfavorable direct materials price variance shows that
a. the actual price of materials was more than the standard price of materials
b. the actiial price of materials was less than the standard price of materials
c. the actual quantity of materials was more than the standard quantity of materials
d. the actual quantity of materials was less than the standard quantity of materials
9. who is in the best position to explain a direct materials or direct labor quantity variance?
a. purchasing agent
b. marketing director
c. accounting manager
d. production supervisior
10. which of the following statements is true?
a. managers investigate all variances
b. repeating favorable variances could indicate that the standards are too low
c. unfavorable variances always indicate a performance problem
d. variances in different areas are never related