Busn 278 Final Exam

BUSN 278 Final Exam

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BUSN 278 Final Exam

1. (TCO 1) A common starting point in the budgeting process is _____.

2. (TCO 2) “Groupthink” is a primary disadvantage of which qualitative forecasting method?

3. (TCO 3) Which of the following is not an example of a seasonal variation?

4. (TCO 4) Which of the following statements regarding the risk associated with R & D activities is incorrect?

5. (TCO 5) Program budgeting does not include _____.

6. (TCO 6) The payback period technique _____.

7. (TCO 6) The profitability index is computed by dividing the _____.

8. (TCO 6) A company projects annual cash inflows of $90,000 each year for the next 5 years if it invests $450,000 in new equipment. The equipment has a 5-year life and an estimated salvage value of $150,000. What is the accounting rate of return on this investment?

9. (TCO 6) If an asset costs $210,000 and is expected to have a $30,000 salvage value at the end of its 10-year life, and generates annual net cash inflows of $30,000 each year, the payback period is _____.

10. (TCO 6) Selma Inc. is comparing several alternative capital budgeting projects as shown below.

11. (TCO 6) Cleaners, Inc. is considering purchasing equipment costing $30,000 with a 6-year useful life. The equipment will provide cost savings of $7,300 and will be depreciated straight-line over its useful life with no salvage value. Cleaners requires a 10% rate of return. What is the approximate net present value of this investment?

12. (TCO 7) Which of the following is not an operating budget?

13. (TCO 7) If the required materials to be purchased are 18,000 pounds, the production needs are three times the direct materials purchases, and the beginning direct materials are three and a half times the direct materials purchases, what are the desired ending direct materials in pounds?

14. (TCO 8) Which of the following is not a cause of...