Which of the following statements is CORRECT?
A. One defect of the IRR method versus the NPV is that the IRR does not take account of cash flows over a project's full life.
B. One defect of the IRR method versus the NPV is that the IRR does not take account of the time value of money.
C. One defect of the IRR method versus the NPV is that the IRR does not take account of the cost of capital.
D. One defect of the IRR method versus the NPV is that the IRR values a dollar received today the same as a dollar that will not be received until sometime in the future.
E. One defect of the IRR method versus the NPV is that the IRR does not take proper account of differences in the sizes of projects.
Answer: E
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Which of the following statements regarding Standards contained in the FASB Accounting Standards Codification (ASC) is true?
A) They have the force of law, and failure to follow them can be prosecuted. B) They apply to financial reporting by all U.S. companies. C) They were created in 2009 when the ASC was created and did not exist prior to that time. D) They have to be approved by the SEC before they become effective.
Collegiate Products produces and sells padded stadium seats emblazoned with a university logo. The company has the capacity to produce as many as 6,000 seats per month but consistently averages much less. When 4,500 seats are produced, each seat has $5 of variable costs and $2 of fixed overhead costs allocated to it. The seats typically sell for $12 each. The company has been approached by a
small college who wishes to purchase 500 seats for special alumni at a price of $5 per seat. If the special order were accepted, net income would: A) decrease by $1,000. B) increase by $2,500. C) decrease by $12,500. D) not change.
An agreement of a seller to supply a buyer with all of the buyer's requirements for certain goods is known as:
A) an output contract. B) a requirements contract. C) a firm offer. D) promissory estoppel.
Kowalski-Schmidt, a brewery headquartered in Kenosha, Wisconsin, has been in business since 1906. They manufacture several brands of value-priced lagers and ales, which are distributed throughout the United States and Canada. Recently the company decided to begin manufacturing a higher-priced, specialty craft beer. To that end, they began a crowdsourcing campaign to help decide on the features of the craft beer brand. This resulted in the company
A. launching a contest, via their website, to solicit the input of consumers and homebrew hobbyists in the United States. B. sending out a survey to the owners of bars and convenience stores where Kowalski-Schmidt's bestselling brand is sold to get feedback on the sales of their products. C. adding a new comments section to their website allowing consumers to leave feedback on their existing brands. D. having the marketing team design a new line of t-shirts promoting the craft beer line, based on the popularity of previous merchandising campaigns. E. sponsoring a local music festival and using the occasion to offer attendees a preview of the new craft beer.