Which of the following statements is true about capital budgeting analysis?
A. A project should be purchased if its net present value (NPV) is positive.
B. A project with only cash outflows and no cash inflows would have two internal rates of return (IRRs).
C. The traditional payback period method should be used for capital budgeting decisions when there is a conflict in the project rankings using the NPV method and the internal rate of return (IRR) method.
D. The net present value (NPV) method should be used to evaluate independent projects, but the internal rate of return (IRR) method should be used to evaluate mutually exclusive projects.
E. The payback period method should be used to evaluate capital budgeting projects that have multiple cash outflows.
Answer: A
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A control that can ensure that receiving clerks are not influenced by quantity information while actually counting incoming goods is to:
a. send a "blind" copy of the purchase order to receiving b. establish a "tickler" file for completed purchase orders c. send copies of a receiving report to accounts payable d. establishing "blanket orders" in purchasing
Under the effective interest method of amortization, the interest expense for each period is the carrying value times the ______________________
Fill in the blank(s) with correct word
Cliff is struggling with the price of produce at his well-established produce markets. The reputation of the markets attracts repeat customers from a 50-mile radius. Recently, local farmers started increasing produce prices for him due to the upsurge in gas prices. Now, Cliff feels it is time to pass the costs onto his customers. Which of the following should Cliff estimate to determine the effect of price changes?
A. Reference price B. Fixed costs C. Price elasticity D. Break-even point quantity E. Markup percentage
For a manufacturer, the cost of all materials purchases and on hand to be used in the manufacturing process is:
a. Merchandise Inventory. b. Finished Goods. c. Work in Process. d. Raw Materials.