40. Trade discounts areprovided to our firm because we: (a) Trade with the vendo

ID: 2457998 • Letter: 4

Question

40. Trade discounts areprovided to our firm because we:

(a) Trade with the vendor.

(b) Are smart enough to calculate the discount and take advantage ofit.

(d) Provided specific services for our vendor as specified by us.

41. The longer the life ofan investment:

(a) The more significant the discount rate.

(b) The less significant the discount rate.

(d) None of the above.

42. Risk is a termindicating all of the following except:

(a) Certainty of future outcomes.

(b) Probability that an unexpected outcome will occur.

(d) Variability of the expected outcome.

. The acquisition of all the following assets are considered incapital budgeting except:

(a) Bringing a new product to market.

(b) Purchase of inventory.

(d) Purchase of office equipment.

44. Capital budgetinginvestments are feasible if, after capital budgeting analysis,the:

(a) Present value of the benefits > the present value of thecosts.

(b) Present value of the costs > the present value of thebenefits.

(d) Both (a) and (c) above.

(e) Both (a) and (b) above.

45. Which of the followinggovernment actions would require a capital budgeting decision?

(a) An increase in sales taxes on all items sold after the first ofnext year.

(b) An increase in the required number of wheelchair ramps availablefor customers entering our business.

40 a 41 a 42 d 43 b 44 d 45 b

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