True or false Capital budget decisions are usually short term in nature. The procedure used to compute
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Question:
True or false
- Capital budget decisions are usually short term in nature.
- The procedure used to compute the present value of a series a cash flows is called discounting.
- The internal rate of return is the discount rate that causes the net present of a project to equal zero.
- When using the net present value method, changing the rate will change the net present value.
- One of the keys of activity based costing is selecting the appropriate cost driver.
- Activity base costing involves analyzing the make up of overhead costs.
- Activity based costing also attempts to increase the amount of non-value added activities.
- One of the advantages of responsibility accounting is that it increases awareness relative to each department’s contribution to the company profit.
- An example of a cost center would be the kitchen in a restaurant.
- An example of an internal failure cost would be the rework of a defectively manufactured part.
- An example of a preventive quality cost would be training for employees.
- Goal congruence is an important part of responsibility accounting.
- An appropriate allocation base for Human Resources Department costs would be headcount.
- Selecting an appropriate cost driver helps ensure the accuracy of overhead costs.
- An annuity represents equal amounts over a period of time.
- The time value of money is an important concept relative to capital budgeting.
- Activity based costing can be used to identify non value-added activities.
- Activity based costing is used to allocate direct material costs accurately to products.
- Responsibility accounting can be used in conjunction with incentive pay.
- Responsibility accounting uses information to assign blame to managers.
Related Book For
Financial Reporting Financial Statement Analysis and Valuation a strategic perspective
ISBN: 978-1285190907
8th edition
Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
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