Devry Busn 278 Budgeting and Forecasting Final Exam

Devry BUSN 278 Budgeting and Forecasting Final Exam

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1. (TCO 1) Which one of the following is not a benefit of budgeting? (Points : 5)It facilitates the coordination of activities.

It provides definite objectives for evaluating performance.

It provides assurance that the company will achieve its objectives.

It provides early warning signs of potential threats.

2. (TCO 2) Which of the following is not a qualitative forecasting method? (Points : 5)Executive opinions

Sales force polling

Delphi method

Classical decomposition

3. (TCO 3) Which of the following statements regarding the t-statistic is true? (Points : 5)The t-statistic cannot be negative.

The t-statistic measures how many standard errors the coefficient is away from the independent variable.

The higher the t-value, the more confidence we have in the coefficient.

Low t-values indicate high reliability.

4. (TCO 4) Which of the following statements regarding the risk associated with R&D activities is incorrect? (Points : 5)The amount of time between the R&D activity and the cash flows from the project does not affect risk.

Greater risk is associated with creating new products than improving existing products.

Risk increases as the time between the R&D activity and the cash flows from the project increases.

Assessing risk is a vital part of research and development.

5. (TCO 5) Program budgeting does not include: (Points : 5)Controlling

Programming

Budgeting

Planning

6. (TCO 6) The payback period technique ___________ (Points : 5)should be used as a final screening tool.

can be the only basis for the capital budgeting decision.

is relatively easy to compute and understand.

considers the expected profitability of a project.

7. (TCO 6) The profitability index is computed by dividing the ___________ (Points : 5)total cash flows by the initial investment.

present value of cash inflows...