ACCT202 Teng 43. Which of the following will increase the net present value of a

Question

ACCT202 Teng 43. Which of the following will increase the net present value of a project? Final Exam Fal 2017 A) An increase in the initial investment B) A decrease in annual cash inflows C) An increase in the discount rate D) A decrease in the discount rate 44. If a company plans to sell 48,000 units of product but sells 60,000, the most appropriate comparison of the cost data associated with the sales will be by a budget based on A) the original planned level of activity B) 54,000 units of activity. C) 60,000 units of activity. D) 48,000 units of activity 45. The formula for the materials price variance is A) (AQ x SP) - (SQ x SP) B) (AQ x AP) - (AQ x SP). C) (AQ × AP)-(SQ x SP). D) (AQ x SP)-(SQ x AP). 46. If a project has a salvage value greater than zero, the salvage value will A) have no effect on the net present value. B) increase the net present value C) increase the payback period. D) decrease the net present value. Which two methods are used most often when establishing a transfer price? A) Negotiated transfer pricing and cost-based transfer pricing B) Cost-based transfer pricing and market-based transfer pricing C) Negotiated transfer pricing and market-based D) Cost-based transfer pricing and standard-based pricing 47. transfer pricing Budget development for the coming year usually starts A) a year in advance B) the first month of the year to be budgeted. C) several months before the end of the current year D) the last month of the previous year 48. Page 1

Explanation / Answer

Q - 43 = Option - D. A decrease in discount rate increases the present values of cash flows due to lower discounting of cash flows

Q - 44 ........ Option - C  Original budget need to be revised to actual activity level = 60000 units

Q - 45 ........Option - B

Q - 46 ...... Option - B

Q - 47 ........ Option - B

Q - 48 ......... Option - D

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