Horngren S Financial And Managerial Accounting The Managerial Chapters 4th Edition Tracie L. Miller-Nobles ,Brenda L. Mattison ,Ella Mae Matsumura - Solutions

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Why should both quantitative and qualitative factors be considered in capital investment decisions?
How can spreadsheet software, such as Excel, help with sensitivity analysis?
What is the decision rule for IRR?
How is IRR calculated with unequal net cash inflows?
How is IRR calculated with equal net cash inflows?
What is the internal rate of return?
What is the profitability index? When it is used?
What is the decision rule for NPV?
What is net present value?
Why are net present value and internal rate of return considered discounted cash flow methods?
How is the present value of an annuity determined?
How is the present value of a lump sum determined?
Explain the difference between the present value factor tables—Present Value of $1 and Present Value of Annuity of $1.
How does compound interest differ from simple interest?
What is an annuity? How does it differ from a lump sum payment?
Why is it preferable to receive cash sooner rather than later?
What is the decision rule for ARR?
How is ARR calculated?
What is the accounting rate of return?
What are some criticisms of the payback method?
What is the decision rule for payback?
How is payback calculated with unequal net cash inflows?
How is payback calculated with equal net cash inflows?
What is the payback method of analyzing capital investments?
List some common cash outflows from capital investments.
List some common cash inflows from capital investments.
What are post-audits? When are they conducted?
What is capital rationing?
Describe the capital budgeting process.
Explain the difference between capital assets, capital investments, and capital budgeting.
Ian Corp. is considering two expansion projects. The first project streamlines the company’s warehousing facilities. The second project automates inventory utilizing bar code scanners. Both projects generate positive NPV, yet Ian Corp. only chooses the bar coding project. Why?a. The payback is
Which of the following is the most reliable method for making capital budgeting decisions?a. ARR methodb. Post-audit methodc. NPV methodd. Payback method
The IRR isa. the interest rate at which the NPV of the investment is zero.b. the firm’s hurdle rate.c. the same as the ARR.d. None of the above
In computing the IRR on an expansion at Mountain Creek Resort, Vernon Valley would consider all of the following excepta. present value factors.b. depreciation on the assets built in the expansion.c. predicted cash inflows over the life of the expansion.d. the cost of the expansion.
Which of the following is true regarding capital rationing decisions?a. Companies should always choose the investment with the highest NPV.b. Companies should always choose the investment with the highest ARR.c. Companies should always choose the investment with the shortest payback.d. None of the
Which of the following affects the present value of an investment?a. The type of investment (annuity versus single lump sum)b. The number of time periods (length of the investment)c. The interest rated. All of the above
Your rich aunt has promised to give you $2,000 a year at the end of each of the next four years to help you pay for college. Using a discount rate of 12%, the present value of the gift can be stated asa. PV = $2,000 (PV factor, i = 4%, n = 12).b. PV = $2,000 (Annuity PV factor, i = 12%, n = 4).c.
Suppose Francine Dunkelberg’s Sweets is considering investing in warehousemanagement software that costs $550,000, has $75,000 residual value, and should lead to cost savings of $130,000 per year for its five-year life. In calculating the ARR, which of the following figures should be used as the
Which of the following methods does not consider the investment’s profitability?a. ARRc. NPVb. Paybackd. IRR
What is the first step of capital budgeting?a. Gathering the money for the investmentb. Identifying potential projectsc. Getting the accountant involvedd. All of the above
What is the decision rule for sell or process further?
What are joint costs? How do they affect the sell or process further decision?
What questions should managers answer when considering selling a product as is or processing further?
What questions should managers answer when considering outsourcing?
What is outsourcing?
What is the most common constraint faced by merchandisers?
What is the decision rule concerning products to emphasize when facing a constraint?
What questions should managers answer when facing constraints?
What is a constraint?
Explain why a segment with an operating loss can cause the company to have a decrease in total operating income if the segment is dropped.
What questions should managers answer when considering dropping a product or segment?
When should special pricing orders be accepted?
When completing a differential analysis, when are the differences shown as positive amounts? As negative amounts?
What questions should managers answer when considering special prices?
What is cost-plus pricing? Who uses it?
What does the target full product cost include?
What is target pricing? Who uses it?
Explain the difference between price-takers and price-setters.
What questions should managers answer when setting regular prices?
What are the two keys in short-term decision making?
What is differential analysis?
When is nonfinancial information relevant?
What are sunk costs? Give an example.
What makes information irrelevant to decision making?
What makes information relevant to decision making?
List the four steps in short-term decision making. At which step are managerial accountants most involved?
When deciding whether to sell as is or process a product further, managers should ignore which of the following?a. The costs of processing the product thus farb. The cost of processing furtherc. The revenue if the product is sold as isd. The revenue if the product is processed further
When making outsourcing decisions, which of the following is true?a. Expected use of the freed capacity is irrelevant.b. The variable cost of producing the product in-house is relevant.c. The total manufacturing unit cost of making the product in-house is relevant.d. Avoidable fixed costs are
In deciding which product lines to emphasize when a production constraint exists, the company should focus on the product line that has the highesta. contribution margin per unit of product.b. contribution margin per unit of the constraint.c. profit per unit of product.d. contribution margin ratio.
In deciding whether to drop its electronics product line, Smith Company should considera. how dropping the electronics product line would affect sales of its other products like DVDs.b. the costs it could save by dropping the product line.c. the revenues it would lose from dropping the product
When companies are price-setters, their products and servicesa. are priced by managers using a target-pricing emphasis.b. tend to have a lot of competitors.c. tend to be commodities.d. tend to be unique.
When pricing a product or service, managers must consider which of the following?a. Only period costsb. Only manufacturing costsc. Only variable costsd. All costs
When making decisions, managers should considera. revenues that differ between alternatives.b. costs that do not differ between alternatives.c. only variable costs.d. sunk costs in their decisions.
Which of the following costs are irrelevant to business decisions?a. Avoidable costsb. Costs that differ between alternativesc. Sunk costsd. Variable costs
Which of the following is relevant to Kitchenware.com’s decision to accept a special order at a lower sale price from a large customer in China?a. The cost of shipping the order to the customerb. The cost of Kitchenware.com’s warehouses in the United Statesc. Founder Eric Crowley’s salaryd.
In making short-term special decisions, what should you do?a. Use a traditional costing approach.b. Focus on total costs.c. Separate variable from fixed costs.d. Focus only on quantitative factors.
Explaining decentralization Decentralization divides company operations into various reporting units.Most decentralized subunits can be described as one of four different types of responsibility centers.Requirements 1 Explain why companies decentralize. Describe some typical methods of
How does capacity affect transfer pricing decisions?
Explain the difference between market-based transfer prices and cost-based transfer prices.
What is a transfer price?
What are some limitations of financial performance measures?
What is the biggest advantage of using RI to evaluate investment centers?
What does RI measure?
How is RI calculated?
What is the biggest disadvantage of using ROI to evaluate investment centers?
What does ROI measure?
Describe the two ways ROI can be calculated.
What are two key performance indicators used to evaluate investment centers?
What is the typical focus of responsibility reports for: cost centers, revenue centers, and profit centers?
Explain the difference between a controllable and a noncontrollable cost.
What are the four perspectives of the balanced scorecard? Briefly describe each.
What is a key performance indicator?
How is the use of a balanced scorecard as a performance evaluation system helpful to companies?
Explain the difference between a lag indicator and a lead indicator.
What are the goals of a performance evaluation system?
What is a performance evaluation system?
List the four types of responsibility centers and briefly describe each.
What is a responsibility center?
What is the purpose of a responsibility accounting system?
Usually, which outweighs the other in decentralization—advantages or disadvantages?

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Horngren S Financial And Managerial Accounting The Managerial Chapters 4th Edition Tracie L. Miller-Nobles ,Brenda L. Mattison ,Ella Mae Matsumura - Solutions

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