Capital Budgeting and Cost Analysis

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Capital Budgeting and Cost Analysis Objective 21.1 1) Which of the following involves the process of making decisions for significant financial investments in projects to develop new products, expa ... nd production capacity, or remodel current production facilities? A) capital budgeting B) working capital management C) master budgeting D) capitalization Answer: A Diff: 1 Objective: 1 AACSB: Analytical thinking 2) Which of the following is a stage of the capital budgeting process that indicates potential capital investments that agree with an organization's strategy? A) identify projects stage B) make predictions stage C) obtain information stage D) implement the decision, evaluate performance, and learn stage Answer: A Diff: 1 Objective: 1 AACSB: Analytical thinking 3) Which of the following is a stage of the capital budgeting process during which a plant manager is queried for assembly time? A) make decisions by choosing among alternatives stage B) obtain information stage C) make predictions stage D) implement the decision, evaluate performance, and learn stage Answer: B Diff: 1 Objective: 1 AACSB: Analytical thinking 4) Which of the following is a stage of the capital budgeting process that forecasts all potential cash flows attributable to the alternative projects? A) identify projects stage B) make decisions by choosing among alternatives stage C) implement the decision, evaluate performance, and learn stage D) make predictions stage Answer: D Diff: 1 Objective: 1 AACSB: Analytical thinking 5) Which of the following is a stage of the capital budgeting process that determines which investment yields the greatest benefit and the least cost to an organization? A) make decisions by choosing among alternatives stage B) make predictions stage C) identify projects stage D) implement the decision, evaluate performance, and learn stage 1Answer: A Diff: 1 Objective: 1 AACSB: Analytical thinking 6) Which of the following is a stage of the capital-budgeting process that tracks realized cash flows and compares those against estimated numbers? A) implement the decision, evaluate performance, and learn stage B) make predictions stage C) identify projects stage D) make decisions by choosing among alternatives stage Answer: A Diff: 1 Objective: 1 AACSB: Analytical thinking 7) Which of the following is the first stage to the capital budgeting process? A) forecast all potential cash flows attributable to the alternative projects B) determine which investment yields the greatest benefit and the least cost to the organization C) obtain funding and make the investments selected D) identify potential capital investments that agree with the organization's strategy Answer: D Diff: 1 Objective: 1 AACSB: Analytical thinking 8) Which of the following is a stage of the capital budgeting process in which a firm obtains funding for the project? A) make decisions by choosing among alternatives stage B) identify projects stage C) obtain information stage D) implement the decision, evaluate performance, and learn stage Answer: D Diff: 1 Objective: 1 AACSB: Analytical thinking 29) Which capital budgeting technique measures all expected future cash inflows and outflows as if they occurred at a single point in time? A) net present value method B) accrual accounting rate-of-return method C) payback method D) sensitivity analysis Answer: C Diff: 2 Objective: 1 AACSB: Analytical thinking 10) The accounting system that corresponds to the project dimension in capital budgeting is the ________. A) net present value method B) internal rate of return C) accrual accounting rate of return D) life-cycle costing Answer: D Diff: 1 Objective: 1 AACSB: Analytical thinking [Show More]

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