may allocate corporate salaries todivisions based on profits.
is used less frequently than the othercriteria.
is the primary criterion used inactivity-based costing.
is a difficult criterionon which to obtainagreement.
Question 2.2.(TCO 9) Which cost-allocation criterion is superior when making aneconomic decision?(Points : 3)
All ofthe above
Question 3.3.(TCO 9) The MOST likely reason for NOT allocating corporate costs todivisions include that(Points : 3)
divisions receive no benefits fromcorporate costs.
these costs are not controllable bydivision managers.
these costs are incurred to supportdivision activities, not corporateactivities.
division resources are already used toattain corporate goals.
requires judgment and should bereevaluated on a regular basis.
should include theinput of management.
should include acost-benefit analysis.
Allof the above
Question 5.5.(TCO 9) The Hassan Corporation has an electric mixer division and anelectric lampdivision. Of a $20,000,000 bond issuance, the electric mixerdivision used $14,000,000 and the electric lamp division used $6,000,000for expansion. Interest costs on the bond totaled $1,500,000 for the year. Which corporate costs should be allocated to divisions?(Points : 3)
Neither fixed norvariable costs
Both fixed andvariable costs
Question 6.6.(TCO 10) The stage of the capital budgeting process in which a firmobtains funding for the project is the(Points : 3)
implement the decision, evaluateperformance, and learn stage.
Question 7.7.(TCO 10) Assume your goal in life is to retire with $1 million. Howmuch would you need to save at the end of each year if investment ratesaverage 9% and you have a 15-year work life?(Points : 3)
Question 8.8.(TCO 10) If the net present value for a project is zero or positive, thismeans that the(Points : 3)
project should beaccepted.
project shouldnot be accepted.
expected rate of return is below therequired rate of return.
Both 1 and 3are correct.
Question 9.9.(TCO 10) An important advantage of the net-present-value method ofcapital budgeting over the internal rate-of-return method is(Points : 3)
the net present value method isexpressed as a percentage.
the net present values of individualprojects can be added to determine theeffects of accepting a combination ofprojects.
there is noadvantage.
Both 1and 2 are correct.
Question 10.10.(TCO 10) Upper Darby Park Department is considering a new capitalinvestment. The following information is available on the investment. Thecost of the machine will be $150,000. The annual cost savings if the newmachine is acquired will be $40,000. The machine will have a five-year life, atwhich time the terminal disposal value is expected to be $20,000. UpperDarby Park Department is assuming no tax consequences. If Upper DarbyPark Department has a required rate of return of 10%, which of thefollowing is closest to the present value of the project?(Points : 3)
There are no reviews yet.