BUSI 354 Quiz 4,5

BUSI 354 Quiz 4- Module 9: Long-term Investment Decisions (Part I)

1. The first step in the capital budgeting decision process model is to
2. Which of the following is NOT one of the methods that aid management in analyzing the expected results of capital budgeting decisions?
3. A negative net present value indicates that the
4. If the net present value analyses of a project resulted in a positive value and the company does not accept the project, it may be assumed that
5. In NPV analysis, if the IRR exceeds WACC
6. If a payback period for a project is greater than its expected useful life, the
7. Saturn Ltd. wants to automate one of its production processes. The new equipment will cost $180,000. In addition, Saturn will incur installation and testing costs of $5,000 and $8,500 respectively. The expected life of the equipment is 8 years and the salvage value of the equipment is estimated at $18,000. The annual cash savings are estimated at $32,000. The company’s cost of capital is 14%. Ignore income taxes. What is the net present value of this investment?
8. Upper Darby Park Department is considering a new capital investment. The following information is available on the investment. The cost of the machine will be $150,000. The annual cost savings if the new machine is acquired will be $40,000. The machine will have a 5-year life, at which time the terminal disposal value is expected to be $20,000. Upper Darby Park Department is assuming no tax consequences. If Upper Darby Park Department has a cost of capital of 10%, which of the following is closest to the net present value of the project?
9. Brady Corp. is considering the purchase of a piece of equipment that costs $20,000. Projected net annual cash flows over the project’s life are: The cash payback period is
10. Mahtomedi Corporation is considering investing in specialized equipment costing $240,000. The equipment has a useful life of 5 years and a residual value of $20,000. Depreciation is calculated using the straight- line method. The expected net cash inflows from the investment are: What is the accounting rate of return on the investment?

BUSI 354 Quiz 5 – Module 10: Inventory Valuation

1. Practical capacity is based on which of the following assumptions?
2. The denominator-level concept based on capacity utilization that satisfies average customer demand that includes seasonal and cyclical factors is called
3. The budgeted fixed manufacturing cost rate is the lowest for
4. When all fixed manufacturing costs and variable manufacturing costs are included as inventoriable costs, the method being used is
5. Which of the following is correct concerning variable vs absorption costing?
6. When comparing the operating incomes between absorption costing and variable costing, and beginning finished inventory exceeds ending finished inventory, it may be assumed that
7. Car Tunes produces car radios. Actual fixed manufacturing overhead is the same as the budgeted amount, $330,000. Production in September increased by 10% over the previous month’s production. August production was 5,000 radios. The production level is the same as the budgeted denominator level. At the end of September, 1,000 radios remained in stock. In August, all of the radios were sold by the end of the month and there was no remaining work in process inventory. What are Car Tune’s appropriate period costs for September if variable costing is used?
8. Car Tunes produces car radios. Actual fixed manufacturing overhead is the same as the budgeted amount, $330,000. Production in September increased by 10% over the previous month’s production. August production was 5,000 radios. The production level is the same as the budgeted denominator level. At the end of September, 1,000 radios remained in stock. In August, all of the radios were sold by the end of the month and there was no remaining work in process inventory. What is the Car Tune’s September cost of goods sold amount if absorption costing is used?
9. The following information pertains tor Consumer Lumber : What is the difference between absorption costing operating income and variable costing operating income?
10. Gabe’s Auto produces and sells an auto part for $30.00 per unit. In 2012, 100,000 parts were produced and 75,000 units were sold. Other information for the year includes: What is the inventoriable cost per unit using variable costing?
11. Marie’s Decorating produces and sells a mantel clock for $100 per unit. In 2012, 100,000 clocks were produced and 80,000 were sold. Other information for the year includes: What is the inventoriable cost per unit using absorption costing?