Managerial Economics Applications Strategies And Tactics 14th Edition by James Test Bank

<< Managing & Coordinating Nursing Care 4th Edition By J.K Test Bank Living Religions 9th Edition By Fisher Test Bank >>
Product Code: 222
Availability: In Stock
Price: $24.99
Qty:     - OR -   Add to Wish List
Add to Compare

Managerial Economics Applications Strategies And Tactics 14th Edition by James Test Bank

Description

WITH ANSWERS
Managerial Economics Applications Strategies And Tactics 14th Edition by James Test Bank

Chapter_5___Business_and_Economic_Forecasting

Multiple Choice

 

1. Time-series forecasting models:

  a. are useful whenever changes occur rapidly and wildly
  b. are more effective in making long-run forecasts than short-run forecasts
  c. are based solely on historical observations of the values of the variable being forecasted
  d. attempt to explain the underlying causal relationships which produce the observed outcome
  e. none of the above

 

ANSWER:   c
POINTS:   1
DIFFICULTY:   Easy
QUESTION TYPE:   Multiple Choice
HAS VARIABLES:   False
NATIONAL STANDARDS:   United States BPROG: Analytic
TOPICS:   Deterministic Trend Analysis
KEYWORDS:   BLOOMS: Knowledge
DATE CREATED:   6/21/2016 8:58 AM
DATE MODIFIED:   6/21/2016 8:58 AM

 

2. The forecasting technique which attempts to forecast short-run changes and makes use of economic indicators known as leading, coincident or lagging indicators is known as:

  a. econometric technique
  b. time-series forecasting
  c. opinion polling
  d. barometric technique
  e. judgment forecasting

 

ANSWER:   d
POINTS:   1
DIFFICULTY:   Easy
QUESTION TYPE:   Multiple Choice
HAS VARIABLES:   False
NATIONAL STANDARDS:   United States BPROG: Analytic
TOPICS:   Barometric Techniques
KEYWORDS:   BLOOMS: Knowledge
DATE CREATED:   6/21/2016 8:58 AM
DATE MODIFIED:   6/21/2016 8:58 AM

 

3. The use of quarterly data to develop the forecasting model Yt = a +bYt1 is an example of which forecasting technique?

  a. Barometric forecasting
  b. Time-series forecasting
  c. Survey and opinion
  d. Econometric methods based on an understanding of the underlying economic variables involved
  e. Input-output analysis

 

ANSWER:   b
POINTS:   1
DIFFICULTY:   Moderate
QUESTION TYPE:   Multiple Choice
HAS VARIABLES:   False
NATIONAL STANDARDS:   United States BPROG: Analytic
TOPICS:   Deterministic Trend Analysis
KEYWORDS:   BLOOMS: Comprehension
DATE CREATED:   6/21/2016 8:58 AM
DATE MODIFIED:   6/21/2016 8:58 AM

 

4. Variations in a time-series forecast can be caused by:

  a. cyclical variations
  b. secular trends
  c. seasonal effects
  d. a and b only
  e. a, b, and c

 

ANSWER:   e
POINTS:   1
DIFFICULTY:   Moderate
QUESTION TYPE:   Multiple Choice
HAS VARIABLES:   False
NATIONAL STANDARDS:   United States BPROG: Analytic
TOPICS:   Deterministic Trend Analysis
KEYWORDS:   BLOOMS: Comprehension
DATE CREATED:   6/21/2016 8:58 AM
DATE MODIFIED:   6/21/2016 8:58 AM

 

5. The variation in an economic time-series which is caused by major expansions or contractions usually
of greater than a year in duration is known as:

  a. secular trend
  b. cyclical variation
  c. seasonal effect
  d. unpredictable random factor
  e. none of the above

 

ANSWER:   b
POINTS:   1
DIFFICULTY:   Moderate
QUESTION TYPE:   Multiple Choice
HAS VARIABLES:   False
NATIONAL STANDARDS:   United States BPROG: Analytic
TOPICS:   Deterministic Trend Analysis
KEYWORDS:   BLOOMS: Comprehension
DATE CREATED:   6/21/2016 8:58 AM
DATE MODIFIED:   6/21/2016 8:58 AM

 

6. The type of economic indicator that can best be used for business forecasting is the:

  a. leading indicator
  b. coincident indicator
  c. lagging indicator
  d. current business inventory indicator
  e. optimism/pessimism indicator

 

ANSWER:   a
POINTS:   1
DIFFICULTY:   Moderate
QUESTION TYPE:   Multiple Choice
HAS VARIABLES:   False
NATIONAL STANDARDS:   United States BPROG: Analytic
TOPICS:   Barometric Techniques
KEYWORDS:   BLOOMS: Comprehension
DATE CREATED:   6/21/2016 8:58 AM
DATE MODIFIED:   6/21/2016 8:58 AM

 

7. Consumer expenditure plans is an example of a forecasting method. Which of the general categories best described this example?

  a. time-series forecasting techniques
  b. barometric techniques
  c. survey techniques and opinion polling
  d. econometric techniques
  e. input-output analysis

 

ANSWER:   c
POINTS:   1
DIFFICULTY:   Moderate
QUESTION TYPE:   Multiple Choice
HAS VARIABLES:   False
NATIONAL STANDARDS:   United States BPROG: Analytic
TOPICS:   Barometric Techniques
KEYWORDS:   BLOOMS: Comprehension
DATE CREATED:   6/21/2016 8:58 AM
DATE MODIFIED:   6/21/2016 8:58 AM

 

8. In the first-order exponential smoothing model, the new forecast is equal to a weighted average of the old forecast and the actual value in the most recent period.

  a. true b. false

 

ANSWER:   a
POINTS:   1
DIFFICULTY:   Moderate
QUESTION TYPE:   Multiple Choice
HAS VARIABLES:   False
NATIONAL STANDARDS:   United States BPROG: Analytic
TOPICS:   Smoothing Techniques
KEYWORDS:   BLOOMS: Comprehension
DATE CREATED:   6/21/2016 8:58 AM
DATE MODIFIED:   6/21/2016 8:58 AM

 

9. Simplified trend models are generally appropriate for predicting the turning points in an economic time series.

  a. true b. false

 

ANSWER:   b
POINTS:   1
DIFFICULTY:   Moderate
QUESTION TYPE:   Multiple Choice
HAS VARIABLES:   False
NATIONAL STANDARDS:   United States BPROG: Analytic
TOPICS:   Deterministic Trend Analysis
KEYWORDS:   BLOOMS: Comprehension
DATE CREATED:   6/21/2016 8:58 AM
DATE MODIFIED:   6/21/2016 8:58 AM

 

10. Smoothing techniques are a form of ____ techniques which assume that there is an underlying pattern to be found in the historical values of a variable that is being forecast.

  a. opinion polling
  b. barometric forecasting
  c. econometric forecasting
  d. time-series forecasting
  e. none of the above

 

ANSWER:   d
POINTS:   1
DIFFICULTY:   Moderate
QUESTION TYPE:   Multiple Choice
HAS VARIABLES:   False
NATIONAL STANDARDS:   United States BPROG: Analytic
TOPICS:   Smoothing Techniques
KEYWORDS:   BLOOMS: Comprehension
DATE CREATED:   6/21/2016 8:58 AM
DATE MODIFIED:   6/21/2016 8:58 AM

 

11. Seasonal variations can be incorporated into a time-series model in a number of different ways, including:

  a. ratio-to-trend method
  b. use of dummy variables
  c. root mean squared error method
  d. a and b only
  e. a, b, and c

 

ANSWER:   d
POINTS:   1
DIFFICULTY:   Moderate
QUESTION TYPE:   Multiple Choice
HAS VARIABLES:   False
NATIONAL STANDARDS:   United States BPROG: Analytic
TOPICS:   Deterministic Trend Analysis
KEYWORDS:   BLOOMS: Comprehension
DATE CREATED:   6/21/2016 8:58 AM
DATE MODIFIED:   6/21/2016 8:58 AM

 

12. For studying demand relationships for a proposed new product that no one has ever used before, what would be the best method to use?

  a. ordinary least squares regression on historical data
  b. market experiments, where the price is set differently in two markets
  c. consumer surveys, where potential customers hear about the product and are asked their opinions
  d. double log functional form regression model
  e. all of the above are equally useful in this case

 

ANSWER:   c
POINTS:   1
DIFFICULTY:   Moderate
QUESTION TYPE:   Multiple Choice
HAS VARIABLES:   False
NATIONAL STANDARDS:   United States BPROG: Reflective Thinking BPROG: Analysis
TOPICS:   Selecting a Forecasting Technique
KEYWORDS:   BLOOMS: Analysis
DATE CREATED:   6/21/2016 8:58 AM
DATE MODIFIED:   6/21/2016 8:58 AM

 

13. Which of the following barometric indicators would be the most helpful for forecasting future sales for an industry?

  a. lagging economic indicators.
  b. leading economic indicators.
  c. coincident economic indicators.
  d. wishful thinking
  e. none of the above

 

ANSWER:   b
POINTS:   1
DIFFICULTY:   Moderate
QUESTION TYPE:   Multiple Choice
HAS VARIABLES:   False
NATIONAL STANDARDS:   United States BPROG: Reflective Thinking BPROG: Analysis
TOPICS:   Barometric Techniques
KEYWORDS:   BLOOMS: Analysis
DATE CREATED:   6/21/2016 8:58 AM
DATE MODIFIED:   6/21/2016 8:58 AM

 

14. An example of a time series data set is one for which the:

  a. data would be collected for a given firm for several consecutive periods (e.g., months).
  b. data would be collected for several different firms at a single point in time.
  c. regression analysis comes from data randomly taken from different points in time.

d. data is created from a random number generation program.

  d. use of regression analysis would impossible in time series.

 

ANSWER:   a
POINTS:   1
DIFFICULTY:   Moderate
QUESTION TYPE:   Multiple Choice
HAS VARIABLES:   False
NATIONAL STANDARDS:   United States BPROG: Analytic
TOPICS:   Deterministic Trend Analysis
KEYWORDS:   BLOOMS: Comprehension
DATE CREATED:   6/21/2016 8:58 AM
DATE MODIFIED:   6/21/2016 8:58 AM

 

15. Examine the plot of data.

Sales

 


                             

 

Time

It is likely that the best forecasting method for this plot would be:

  a. a two-period moving average
  b. a secular trend upward
  c. a seasonal pattern that can be modeled using dummy variables or seasonal adjustments
  d. a semi-log regression model
  e. a cubic functional form

 

ANSWER:   c
POINTS:   1
DIFFICULTY:   Moderate
QUESTION TYPE:   Multiple Choice
HAS VARIABLES:   False
NATIONAL STANDARDS:   United States BPROG: Reflective Thinking BPROG: Analysis
TOPICS:   Deterministic Trend Analysis
KEYWORDS:   BLOOMS: Analysis
DATE CREATED:   6/21/2016 8:58 AM
DATE MODIFIED:   6/21/2016 8:58 AM

 

16. Emma uses a linear model to forecast quarterly same-store sales at the local Garden Center.  The results of her multiple regression is:
Sales = 2,800 + 200T 350D

 

where T goes from 1 to 16 for each quarter of the year from the first quarter of 2006 (06I) through the fourth quarter of 2009 (09 IV).  D is a dummy variable which is 1 if sales are in the cold and dreary first quarter, and zero otherwise, because the months of January, February, and March generate few sales at the Garden Center.  Use this model to estimate sales in a store for the first quarter of 2010 in the 17th month; that is: {2010 I}. Emmas forecast should be:

  a. 5,950
  b. 6,200
  c. 6,350
  d. 6,000
  e. 5,850

 

ANSWER:   e
POINTS:   1
DIFFICULTY:   Difficult
QUESTION TYPE:   Multiple Choice
HAS VARIABLES:   False
NATIONAL STANDARDS:   United States BPRPOG: Analysis
TOPICS:   Deterministic Trend Analysis
KEYWORDS:   BLOOMS: Analysis
DATE CREATED:   6/21/2016 8:58 AM
DATE MODIFIED:   6/21/2016 8:58 AM

 

17. Select the correct statement.

  a. Qualitative forecasts give the direction of change.
  b. Quantitative forecasts give the exact amount or exact percentage change.
  c. Diffusion forecasts use the proportion of the forecasts that are positive to forecast up or down.
  d. Surveys are a form of qualitative forecasting.
  e. all of the above are correct.

 

ANSWER:   e
POINTS:   1
DIFFICULTY:   Moderate
QUESTION TYPE:   Multiple Choice
HAS VARIABLES:   False
NATIONAL STANDARDS:   United States BPROG: Reflective Thinking BPROG: Analysis
TOPICS:   Selecting a Forecasting Technique
KEYWORDS:   BLOOMS: Comprehension
DATE CREATED:   6/21/2016 8:58 AM
DATE MODIFIED:   6/21/2016 8:58 AM

 

18. If two alternative economic models are offered, other things equal, we would

  a. tend to pick the one with the lowest R2.
  b. select the model that is the most expensive to estimate.
  c. pick the model that was the most complex.
  d. select the model that gave the most accurate forecasts
  e. all of the above

 

ANSWER:   d
POINTS:   1
DIFFICULTY:   Moderate
QUESTION TYPE:   Multiple Choice
HAS VARIABLES:   False
NATIONAL STANDARDS:   United States BPROG: Reflective Thinking BPROG: Analysis
TOPICS:   Selecting a Forecasting Technique
KEYWORDS:   BLOOMS: Comprehension
DATE CREATED:   6/21/2016 8:58 AM
DATE MODIFIED:   6/21/2016 8:58 AM

 

19. Mr. Geppetto uses exponential smoothing to predict revenue in his wood carving business. He uses a weight of = .4 for the nave forecast and (1-) = .6 for the past forecast.  What revenue did he predict for March using the data below?  Select closet answer.

MONTH   REVENUE        FORECAST

Nov 100 100
Dec 90 100
Jan 115 -
Feb 110 -
MARCH ? ?

  a. 106.2
  b. 104.7
  c. 103.2
  d. 102.1
  e. 101.7

 

ANSWER:   a
POINTS:   1
DIFFICULTY:   Moderate
QUESTION TYPE:   Multiple Choice
HAS VARIABLES:   False
NATIONAL STANDARDS:   United States BPROG: Reflective Thinking BPROG: Analysis
TOPICS:   Smoothing Techniques
KEYWORDS:   BLOOMS: Comprehension
DATE CREATED:   6/21/2016 8:58 AM
DATE MODIFIED:   6/21/2016 8:58 AM

 

20. Suppose a plot of sales data over time appears to follow an S-shape as illustrated below.
Sales                                                



 

Time

Which of the following is likely that the best forecasting functional form to use for sales data above?

  a. A linear trend, Sales = a + b T
  b. A quadratic shape in T, using T-squared as another variable, Sales = a + b T + cT2.
  c. A semi-log form as sales appear to be growing at a constant percentage rate, Ln Sales = a + bT
  d. A cubic shape in T, using T-squared and T-cubed as variables, Sales = a + b T + cT2 + d T3.
  e. A quadratic shape in T and T-squared as variables, Sales = a + b T + cT2

 

ANSWER:   d
POINTS:   1
DIFFICULTY:   Difficult
QUESTION TYPE:   Multiple Choice
HAS VARIABLES:   False
NATIONAL STANDARDS:   United States BPRPOG: Analysis
TOPICS:   Alternative Forecasting Techniques
KEYWORDS:   BLOOMS: Analysis
DATE CREATED:   6/21/2016 8:58 AM
DATE MODIFIED:   6/21/2016 8:58 AM

 

21. Regarding forecasting, which of the following statements is NOT true?

  a. Operations managers need sales forecasts to plan future production.
  b. Financial managers need estimates of future sales revenues, disbursements & capital expenditures in order to plan effectively.
  c. Forecasts of credit conditions are needed to plan the cash needs of the firm.
  d. Public administrators and managers of NFP corporations need not forecast, since they need not make a profit.
  e. Both c and d are false.

 

ANSWER:   d
POINTS:   1
DIFFICULTY:   Moderate
QUESTION TYPE:   Multiple Choice
HAS VARIABLES:   False
NATIONAL STANDARDS:   United States BPROG: Reflective Thinking BPROG: Analysis
TOPICS:   The Significance of Forecasting
KEYWORDS:   BLOOMS: Comprehension
DATE CREATED:   8/12/2016 2:53 PM
DATE MODIFIED:   8/12/2016 3:31 PM

 

22. All of the following are criteria used to select a forecasting technique EXCEPT:

  a. the accuracy required of the forecasting model
  b. the time required to complete the model
  c. the complexity of the relationships being forecast
  d. the cost associated with developing the forecasting model
  e. all of these are criteria used to select a forecasting technique

 

ANSWER:   b
POINTS:   1
DIFFICULTY:   Moderate
QUESTION TYPE:   Multiple Choice
HAS VARIABLES:   False
NATIONAL STANDARDS:   United States BPROG: Reflective Thinking BPROG: Analysis
TOPICS:   Selecting a Forecasting Technique
KEYWORDS:   BLOOMS: Comprehension
DATE CREATED:   8/12/2016 2:53 PM
DATE MODIFIED:   8/12/2016 3:36 PM

 

Subjective Short Answer

 

23. The Accuweather Corporation manufactures barometers and thermometers for weather forecasters. In an attempt to forecast its future needs for mercury, Accuweathers chief economist estimated average monthly mercury needs as:

N = 500 + 10X

where N = monthly mercury needs (units) and X = time period in months (January 2008= 0). The following monthly seasonal adjustment factors have been estimated using data from the past five years:

Month Adjustment Factor
January   15%
April   10%
July 20%
September     5%
December 10%

 

(a) Forecast Accuweathers mercury needs for January, April, July, September, and December of 2010.
(b) The following actual and forecast values of mercury needs in the month of November have been recorded:
   
  Year Actual Forecast  
  2008 456 480  
  2009 324 360  
  2007 240 240  

What seasonal adjustment factor should the firm use for November?

ANSWER:    

(a)   Unadjusted Adjusted
  Month Forecast Forecast
  January 2010 500 + 10(24) = 740 740(1.15) = 851
  April 2010 500 + 10(27) = 770 770(1.10) = 847
  July 2010 500 + 10(30) = 800 800(.80) = 640
  September 2010 500 + 10(32) = 820 820(1.05) = 861
  December 2010 500 + 10(35) = 850 850(.90) = 765
       
(b) Year Actual Forecast Actual/Forecast
  2008 456 480 .95
  2009 324 360 .90
  2007 240 240 1.00
      Total 2.85
         
 
POINTS:   1
DIFFICULTY:   Difficult
QUESTION TYPE:   Subjective Short Answer
HAS VARIABLES:   False
NATIONAL STANDARDS:   United States BPRPOG: Analysis
TOPICS:   Deterministic Trend Analysis
KEYWORDS:   BLOOMS: Analysis
DATE CREATED:   6/21/2016 8:58 AM
DATE MODIFIED:   6/21/2016 8:58 AM

 

24. Milner Brewing Company experienced the following monthly sales (in thousands of barrels) during 2010:

Jan. Feb. Mar. Apr. May June
100 92 112 108 116 116

 

(a) Develop 2-month moving average forecasts for March through July.
(b) Develop 4-month moving average forecasts for May through July.
(c) Develop forecasts for February through July using the exponential smoothing method (with w = .5). Begin by assuming .

 

ANSWER:    

        (c) Exponential
  Actual (a) 2-month (b) 4-month Smoothing
Month Sales Moving Average Moving Average w = .5
         
Jan. 100
Feb. 92 100
Mar. 112 100 + .5(82 100) = 96
April 108 96 + .5(112 96) = 104
May 116 104 + .5(108 104) = 106
June 116 106 + .5(116 106) = 111
July 111 + .5(116 111) = 113.5
 
     
     
 
POINTS:   1
DIFFICULTY:   Difficult
QUESTION TYPE:   Subjective Short Answer
HAS VARIABLES:   False
NATIONAL STANDARDS:   United States BPRPOG: Analysis
TOPICS:   Smoothing Techniques
KEYWORDS:   BLOOMS: Analysis
DATE CREATED:   6/21/2016 8:58 AM
DATE MODIFIED:   6/21/2016 8:58 AM

 

 

Chapter_17___Long_Term_Investment_Analysis

Multiple Choice

 

1. Capital expenditures:

  a. are easily reversible
  b. are forms of operating expenditures
  c. Affect long-run future profitability
  d. Involve only money, not machinery
  e. none of the above

 

ANSWER:   c
POINTS:   1
DIFFICULTY:   Easy
QUESTION TYPE:   Multiple Choice
HAS VARIABLES:   False
NATIONAL STANDARDS:   United States BPROG: Analytic
TOPICS:   The Nature of Capital Expenditure Decisions
KEYWORDS:   BLOOMS: Comprehension
DATE CREATED:   6/21/2016 9:18 AM
DATE MODIFIED:   6/21/2016 9:18 AM

 

2. Any current outlay that is expected to yield a flow of benefits beyond one year in the future is:

  a. a capital gain
  b. a wealth maximizing factor
  c. a capital expenditure
  d. a cost of capital
  e. a dividend reinvestment

 

ANSWER:   c
POINTS:   1
DIFFICULTY:   Easy
QUESTION TYPE:   Multiple Choice
HAS VARIABLES:   False
NATIONAL STANDARDS:   United States BPROG: Analytic
TOPICS:   The Nature of Capital Expenditure Decisions
KEYWORDS:   BLOOMS: Comprehension
DATE CREATED:   6/21/2016 9:18 AM
DATE MODIFIED:   6/21/2016 9:18 AM

 

3. If the acceptance of Project A makes it impossible to accept Project B, these projects are:

  a. contingent projects
  b. complementary projects
  c. mutually inclusive projects
  d. mutually exclusive projects
  e. none of the above

 

ANSWER:   d
POINTS:   1
DIFFICULTY:   Easy
QUESTION TYPE:   Multiple Choice
HAS VARIABLES:   False
NATIONAL STANDARDS:   United States BPROG: Analytic
TOPICS:   The Capital Budgeting Process
KEYWORDS:   BLOOMS: Comprehension
DATE CREATED:   6/21/2016 9:18 AM
DATE MODIFIED:   6/21/2016 9:18 AM

 

4. Which of the following is (are) a guideline(s) to be used in the estimation of cash flows?

  a. cash flows should be measured on an incremental basis
  b. cash flows should be measured on an after-tax basis
  c. all the indirect effects of the project should be included
  d. all of the above
  e. none of the above

 

ANSWER:   d
POINTS:   1
DIFFICULTY:   Moderate
QUESTION TYPE:   Multiple Choice
HAS VARIABLES:   False
NATIONAL STANDARDS:   United States BPROG: Reflective Thinking BPROG: Analysis
TOPICS:   The Capital Budgeting Process
KEYWORDS:   BLOOMS: Comprehension
DATE CREATED:   6/21/2016 9:18 AM
DATE MODIFIED:   6/21/2016 9:18 AM

 

5. In order to help assure that all relevant factors will be considered, the capital-expenditure selection process should include the following steps except:

  a. generating alternative capital-investment project proposals
  b. estimating cash flows for the project proposals
  c. reviewing the investment projects after they have been implemented
  d. allocate manpower to the various divisions within the firm
  e. a and d

 

ANSWER:   d
POINTS:   1
QUESTION TYPE:   Multiple Choice
HAS VARIABLES:   False
DATE CREATED:   6/21/2016 9:18 AM
DATE MODIFIED:   9/5/2016 4:57 PM

 

6. Which of the following would not be classified as a capital expenditure for decision-making purposes?

  a. purchase of a building
  b. investment in a new milling machine
  c. purchase of 90-day Treasury Bills
  d. investment in a management training program
  e. all of the above are capital expenditures

 

ANSWER:   c
POINTS:   1
DIFFICULTY:   Moderate
QUESTION TYPE:   Multiple Choice
HAS VARIABLES:   False
NATIONAL STANDARDS:   United States BPROG: Reflective Thinking BPROG: Analysis
TOPICS:   A Basic Framework for Capital Budgeting
KEYWORDS:   BLOOMS: Comprehension
DATE CREATED:   6/21/2016 9:18 AM
DATE MODIFIED:   6/21/2016 9:18 AM

 

7. The decision by the Municipal Transit Authority to either refurbish existing buses, buy new large buses, or to supplement the existing fleet with mini-buses is an example of:

  a. independent projects
  b. mutually exclusive projects
  c. contingent projects
  d. separable projects
  e. none of the above

 

ANSWER:   b
POINTS:   1
DIFFICULTY:   Easy
QUESTION TYPE:   Multiple Choice
HAS VARIABLES:   False
NATIONAL STANDARDS:   United States BPROG: Analytic
TOPICS:   The Capital Budgeting Process
KEYWORDS:   BLOOMS: Comprehension
DATE CREATED:   6/21/2016 9:18 AM
DATE MODIFIED:   6/21/2016 9:18 AM

 

8. Which of the following is (are) a basic principle(s) when estimating a projects cash flows?

  a. cash flows should be measured on a pre-tax basis
  b. cash flows should ignore depreciation since it is a non-cash charge
  c. only direct effects of a project should be included in the cash flow calculations
  d. cash flows should be measured on an incremental basis
  e. all of the above

 

ANSWER:   d
POINTS:   1
DIFFICULTY:   Moderate
QUESTION TYPE:   Multiple Choice
HAS VARIABLES:   False
NATIONAL STANDARDS:   United States BPROG: Reflective Thinking BPROG: Analysis
TOPICS:   The Capital Budgeting Process
KEYWORDS:   BLOOMS: Comprehension
DATE CREATED:   6/21/2016 9:18 AM
DATE MODIFIED:   6/21/2016 9:18 AM

 

9. Which of the following items is (are) not considered as part of the net investment calculation?

  a. installation and shipping charges
  b. acquisition cost of new asset
  c. salvage value of old equipment that is being replaced
  d. first years net cash flow
  e. c and d

 

ANSWER:   d
POINTS:   1
DIFFICULTY:   Moderate
QUESTION TYPE:   Multiple Choice
HAS VARIABLES:   False
NATIONAL STANDARDS:   United States BPROG: Reflective Thinking BPROG: Analysis
TOPICS:   The Capital Budgeting Process
KEYWORDS:   BLOOMS: Comprehension
DATE CREATED:   6/21/2016 9:18 AM
DATE MODIFIED:   9/5/2016 5:03 PM

 

10. The relationship between NPV and IRR is such that :

  a. both approaches always provide the same ranking of alternatives
  b. the IRR of a project is equal to the firms cost of capital when the NPV of a project is $0
  c. if the NPV of a project is negative, then the IRR must be greater than the cost of capital
  d. all of the above
  e. none of the above

 

ANSWER:   b
POINTS:   1
DIFFICULTY:   Moderate
QUESTION TYPE:   Multiple Choice
HAS VARIABLES:   False
NATIONAL STANDARDS:   United States BPROG: Reflective Thinking BPROG: Analysis
TOPICS:   The Capital Budgeting Process
KEYWORDS:   BLOOMS: Comprehension
DATE CREATED:   6/21/2016 9:18 AM
DATE MODIFIED:   6/21/2016 9:18 AM

 

11. In determining the optimal capital budget, one should choose those projects whose ____ exceeds the firms ____ cost of capital.

  a. internal rate of return, average
  b. internal rate of return, marginal
  c. internal rate of return, historic
  d. average rate of return, marginal
  e. none of the above

 

ANSWER:   b
POINTS:   1
DIFFICULTY:   Moderate
QUESTION TYPE:   Multiple Choice
HAS VARIABLES:   False
NATIONAL STANDARDS:   United States BPROG: Reflective Thinking BPROG: Analysis
TOPICS:   The Capital Budgeting Process
KEYWORDS:   BLOOMS: Comprehension
DATE CREATED:   6/21/2016 9:18 AM
DATE MODIFIED:   6/21/2016 9:18 AM

 

12. GE Appliance Division believes which of the following warrants shifting assembly of appliances back from Shanghai to Louisville, KY:.

  a. The negotiation of a two-tiered wage structure for union labor,
  b. Faster innovations when product design engineers and assembly line team leaders are located in the same place,
  c. quicker delivery to retail dealers reduce inventory storage
  d. none of the above,
  e. all of the above.

 

ANSWER:   e
POINTS:   1
DIFFICULTY:   Moderate
QUESTION TYPE:   Multiple Choice
HAS VARIABLES:   False
NATIONAL STANDARDS:   United States BPROG: Reflective Thinking BPROG: Analysis
TOPICS:   Managerial Challenge
KEYWORDS:   BLOOMS: Comprehension
DATE CREATED:   6/21/2016 9:18 AM
DATE MODIFIED:   6/21/2016 9:18 AM

 

13. The cost of capital can be thought of as the rate of return required by investors in the firms securities.

  a. true
  b. false

 

Write a review

Your Name:


Your Review: Note: HTML is not translated!

Rating: Bad           Good

Enter the code in the box below:



 

Once the order is placed, the order will be delivered to your email less than 24 hours, mostly within 4 hours. 

If you have questions, you can contact us here

ANSWER:   a
POINTS:   1
DIFFICULTY:   Moderate
QUESTION TYPE:   Multiple Choice
HAS VARIABLES: