Management accounting

Annual demand = 5,000 units
Order quantity = 1,000 units

Number of orders per year?

• 4

• 5

• 6

• 7

Variable cost per unit will:

• Changes with output

• Remains constant

• Is always indirect

• Is always fixed

Which of the following is DATA?

• “Profit increased by 20% this year.”

• “Demand is growing.”

• “The company is performing well.”

• “Sales were 5,000 units.”

Good information must be:

• Expensive

• Lengthy

• Relevant

• Complext

What is the primary purpose of investment appraisal?

• To evaluate the financial performance of a company

• To assess the viability of an investment project

• To determine employee performance

• To analyze market trends

What does NPV stand for in investment appraisal?

• Net Performance Value

• New Project Value

• Net Profit Value

• Net Present Value

Which of the following is a limitation of the Payback Period method?

• It considers the time value of money

• It ignores cash flows after the payback period

• It is difficult to calculate

• It requires detailed financial forecasting

In which scenario is the Payback Period method most useful?

• When quick recovery of investment is a priority

• When cash flows are expected to be stable over time

• When evaluating long-term projects

• When assessing projects with high uncertainty