WorksheetsManagement Accounting Quiz
Total questions: 20
Worksheet time: 10mins
The payback method ignores the ________. Select one:
early cash flows
time value of money
cash flows occurring during the payback period
None of the above
During inflationary periods the level of capital expenditures made by firms tends to ________. Select one:
increase
decrease
remain the same
None of the above
Multiple internal rates of return sometimes occur when a project's cash flow patterns contain ________.
more than one sign change
less than four sign changes
more than two sign changes
None of the above
The ________ is defined as the present value of net cash flows form the project minus the net investment. Select one: a. profitability index b. pay back period c. net present value d. internal rate of return
profitability index
pay back period
net present value
internal rate of return
The break-even point in total sales decreases when: Select one:
variable cost increases and sales remain unchanged
variable cost increases and sales increase
fixed cost increases
fixed cost decreases
An organization's break-even point is 4,000 units at a sales price of 50 per unit, variable cost of 30 per unit, and total fixed costs of 80,000. If the company sells 500 additional units, by how much will its profit increase? Select one:
15,000
12,00
10,000
25,000
An increase in the unit variable cost will generally cause an increase in all of the following except Select one:
the break-even point
contribution margin
total variable costs
unit selling price
The profitability index is interpreted as the present value return ________. Select one:
in percent form
for each dollar of initial investment
per payback period
per time period
If a project's net cash flow is $17,000 a year for the next 7 years, the net investment is $75,000, and the cost of capital is 10 percent, what is the NPV of the project? Select one:
44,000
7,500
86,279
7,756
If variable cost as a percentage of sales increases, the Select one:
contribution margin percentage increases
break-even point in pesos increases
selling price increases
fixed costs decrease
If variable cost as a percentage of sales increases, the Select one:
selling price increases
contribution margin percentage increases
break-even point in pesos increases
fixed costs decrease
Which of the following is a reason why above-normal profits may be available in the market place? Select one:
All of the above
Buyer preference for established brand names
Superior access to lower cost financial resources
Exclusive ownership of superior natural resource deposits
The Red Lions Brotherhood is planning its annual Riverboat Extravaganza. The Extravaganzacommittee has assembled the following expected costs for the event:Dinner per person P70;Programs and souvenir per person 30; Orchestra 15,000; Tickets and advertising 7,000; Riverboat rental 48,000; Floor show and strolling entertainment 10,000.The committee members would like to charge P300 per person for the evening’s activities.Assume that only 250 persons are expected to attend the extravaganza, what ticket price mustbe charged to breakeven? Select one:
390
320
350
420
Which of the following is an example of a real option in capital budgeting? Select one:
All of the above
Shutdown option
Growth option
Investment timing options
The ________ is defined as the discount rate that equates the present value of the net cash flows from a project with the present value of the net investment. Select one:
profitability index
net present value
internal rate of return
pay back period
As fixed costs for a firm rise, all other things held constant, the breakeven point will Select one:
not be affected by fixed costs
decrease
increase
be unchanged
If all goes according to plan except that unit variable cost falls, Select one:
profit will be higher than expected
the contribution margin percentage will be lower than expected
total contribution margin will be lower than expected
per-unit contribution margin will be lower than expected
Albatross Company has fixed costs of 90,300. At a sales volume of 360,000, return onsales is 10%; at a 600,000 volume, return on sales is 20%. What is the break-even volume? Select one:
258,000
301,000
240,000
225,000
Green Corporation expects to sell 3,000 plants a month. Its operations manager estimated thefollowing monthly costs: Variable costs 7,500;Fixed costs 15,000. What sales price per plant does she need to achieve to begin making a profit if she sells theestimated number of plants per month? Select one:
5.00
2.50
7.50
7.51
The Hard Company sells widgets. The company breaks even at an annual sales volume of80,000 units. At an annual sales volume of 100,000 units the company reports a profit of 220,000.The annual fixed costs for the Hard Company are: Select one:
800,000
1,000,000
880,000
1,100,000
