In comparing the internal rate of return and net present value methods of evaluation,
A) Internal Rate of Return is theoretically superior, but financial managers prefer Net Present Value.
B) Financial managers prefer net present value, because it measures benefits relative to the costs.
C) Financial mangers prefer net present value, because it is presented as a rate of return.
D) Net Present Value is not theoretically superior, but financial mangers prefer to use it anyway.
B
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Diehl Corporation uses an activity-based costing system with three activity cost pools. The company has provided the following data concerning its costs and its activity-based costing system:Costs:Manufacturing overhead$480,000Selling and administrative expenses 100,000Total 580,000Distribution of resource consumption:Activity Cost Pools?Order SizeCustomer SupportOtherTotalManufacturing overhead5%85%10%100%Selling and administrative expenses60%20%20%100%The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs.You have been asked to complete the first-stage allocation of costs to the activity cost pools.How much cost, in total, should NOT be allocated to orders and products in the second stage of the allocation process if the
activity-based costing system is used for internal decision-making? A. $68,000 B. $58,000 C. $0 D. $116,000
Jackson & Sons uses packing machines to prepare its products for shipping. One machine costs $397,500 and lasts 5 years before it needs replaced. The machine will be worthless after the 5 years. The annual aftertax operating cost per machine is $38,400. What is the equivalent annual cost of one machine if the required rate of return is 16 percent?
A) $148,556.67 B) $159,800.23 C) $156,004.12 D) $143,006.15 E) $154,224.08
Why is creating a time schedule important when it comes to developing a career management plan?
What will be an ideal response?
Suppose Firms A and B have the same amount of assets, pay the same interest rate on their debt, have the same basic earning power (BEP), and have the same tax rate. However, Firm A has a higher debt ratio. If BEP is greater than the interest rate on debt, Firm A will have a higher ROE as a result of its higher debt ratio
a. True b. FalseIndicate whether the statement is true or false