Question 1. Question : Which of the following costs is not relevant in decision making?
Student Answer: Sunk cost
Incremental cost
Opportunity cost
Differential cost
Points Received: 4 of 4
Comments:
Question 2. Question : Which of the following does not take the time value of money into account?
Student Answer: Internal rate of return
Net present value
Payback period
None of the above
Points Received: 0 of 4
Comments:
Question 3. Question : Which of the following is not a capital budgeting decision?
Student Answer: Purchasing new equipment
Replacing old equipment
Producing a film project
Planning for retirement
Points Received: 4 of 4
Comments:
Question 4. Question : Which of the following is an example of a sunk cost?
Student Answer: Direct materials
Variable overhead
Equipment depreciation
Future cost
Points Received: 4 of 4
Comments:
Question 5. Question : A revenue that differs between alternatives is called a(n):
Student Answer: Incremental revenue.
Irrelevant revenue.
Joint revenue.
Opportunity revenue.
Points Received: 4 of 4
Comments:
Question 6. Question : Capital expenditure decisions
Student Answer: are also called capital budgeting decisions.
involve the acquisition of long-lived assets.
have a major, long-term effect on a firm’s operations.
All of the above are correct.
Points Received: 4 of 4
Comments:
Question 7. Question : The rate of return that equates the present value of future cash flows to the investment outlay is the
Student Answer: hurdle rate.
internal rate of return.
payback return.
accounting rate of return.
Points Received: 4 of 4
Comments:
Question 8. Question : Which of the following is never considered in incremental analysis?
Student Answer: Incremental revenue
Sunk costs
Incremental profit
Differential costs
Points Received: 4 of 4
Comments:
Question 9. Question : Which of the following is often not a differential cost?
Student Answer: Direct labor
Direct material
Variable manufacturing overhead
Fixed manufacturing overhead
Points Received: 0 of 4
Comments:
Question 10. Question : The required rate of return used to calculate an investment’s net present value is related to the firm’s
Student Answer: contribution margin.
cost of capital.
depreciation methods.
fixed costs.
Points Received: 0 of 4