True or false

1. Capital budget decisions are usually short term in nature.
2. The procedure used to compute the present value of a series a cash flows is called discounting.
3. The internal rate of return is the discount rate that causes the net present of a project to equal zero.
4. When using the net present value method, changing the rate will change the net present value.
5. One of the keys of activity based costing is selecting the appropriate cost driver.
6. Activity base costing involves analyzing the make up of overhead costs.
7. Activity based costing also attempts to increase the amount of non-value added activities.
8. One of the advantages of responsibility accounting is that it increases awareness relative to each department’s contribution to the company profit.
9. An example of a cost center would be the kitchen in a restaurant.
10. An example of an internal failure cost would be the rework of a defectively manufactured part.
11. An example of a preventive quality cost would be training for employees.
12. Goal congruence is an important part of responsibility accounting.
13. An appropriate allocation base for Human Resources Department costs would be headcount.
14. Selecting an appropriate cost driver helps ensure the accuracy of overhead costs.
15. An annuity represents equal amounts over a period of time.
16. The time value of money is an important concept relative to capital budgeting.
17. Activity based costing can be used to identify non value-added activities.
18. Activity based costing is used to allocate direct material costs accurately to products.
19. Responsibility accounting can be used in conjunction with incentive pay.
20. Responsibility accounting uses information to assign blame to managers.

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The detailed answer for the above question is provided below 1 False Capital budget decisions are typically longterm in nature involving significant i... View the full answer