APL has an overall cost of capital of 11.6 percent and a beta of 1.31. The firm is contemplating a new project that is unrelated to the firm's current operations. SKL is a firm that operates similarly to the new project and SKL has a cost of capital of 10.7 percent. APL knows that it will be less efficient than SKL and thus feels that an adjustment of +1 percent should be added to the project's discount rate to allow for this inefficiency. What discount rate should be assigned to the new project?
A) 10.7 percent
B) 11.3 percent
C) 11.7 percent
D) 11.6 percent
E) 12.6 percent
C) 11.7 percent
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An ES is constructed with a set of rules, but as data on real successes and failures of decisions is accumulated and fed into the system, the _____ refines the rules to accomplish a higher success rate.
Fill in the blank(s) with the appropriate word(s).
An internal control benefit of centralized purchasing in an organization includes which of the following?
a. Separation of authorization from the custody and recording function. b. An increase in the number of vendors used. c. Increased compensation of agents through side agreements. d. Mathematically accurate vendor invoices.
List and briefly discuss the two basic components of a computerized accounting information system.
What will be an ideal response?
The gross profit method of inventory valuation is NOT valid when
a. there is substantial increase in the quantity of inventory during the year. b. there is substantial increase in the cost of inventory during the year. c. the gross margin percentage changes significantly during the year. d. all ending inventory is destroyed by fire before it can be counted.