Reference no: EM131211227
The key to analyzing a sell as is or process further decision is to determine that:
opportunity costs exceed sunk costs
incremental revenues exceed incremental costs
differential costs do not exist
all allocated costs are included in the decision.
In a capital budgeting decision, if a firm uses the net present value method and a 12% discount rate, what does a negative net present value indicate?
The proposal's rate of return exceeds 12%.
The proposal's rate of return is less than the minimum rate required.
The proposal earns a rate of return between 10% and 12%.
None of these.
Which of the following is not an important qualitative factor to consider in the capital budgeting decision?
regulations that mandate investment to meet safety, environmental, or access requirements.
technological developments within the industry may require new facilities to maintain customers or market share at the cost of lower ROI for a period of time.
commitment to a segment of the business that requires capital investments to achieve or regain competitiveness even though that segment does not have as great an ROI as others.
all of these are important qualitative factors to consider.
In a make or buy decision, which of the following costs would be considered relevant?
avoidable costs.
unavoidable costs.
sunk costs.
allocated costs.
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Experiences an equal increase or decrease in sales
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What does a negative net present value indicate
: The key to analyzing a sell as is or process further decision is to determine that: In a capital budgeting decision, if a firm uses the net present value method and a 12% discount rate, what does a negative net present value indicate?
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