I must have answers in 45 minutes. I will give a tip,


Question Description:

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I must have answers in 45 minutes. I will give a tip, guaranteed 1. A truck, costing $25,000 and uninsured, was wrecked the very first day it was used. It can either be disposed of for $5,000 cash and be replaced with a similar truck costing $27,000, or rebuilt for $20,000 and be brand new as far as operating characteristics and looks are concerned. The best choice provides a net savings of: (Points : 2) $2,000. $5,000. $7,000. $12,000. 2. A decision bias is an inherent tendency of most decision makers that leads to incorrect decisions. An example of decision bias is: (Points : 2) Failure to consider all relevant costs. Failure to properly identify sunk costs as irrelevant. Failure to consider opportunity cost. Failure to adjust for the time value of money. 3. The opportunity cost of making a component part in a factory with excess capacity for which there is no alternative use is: (Points : 2) The variable manufacturing cost of the component. The total manufacturing cost of the component. The total variable cost of the component. The fixed manufacturing cost of the component. Zero. 4. Done on a regular basis, relevant cost pricing in special order decisions can erode normal pricing policies and lead to: (Points : 2) Overconfidence in decision-making. A loss in the firm’s profitability. Conflicting goals between management and sales personnel. A cost leadership strategy. Maximization of resources. 5. Which one of the following is most descriptive of strategic analysis? (Points : 2) Quantitative. Customer focus. Short-term focus. Individual product focus. Not linked to the firm’s strategy. 6. An effective analysis of sales mix needs to include an analysis of: (Points : 2) Value chain analysis. Production constraints. Sales mix costing. Revenue forecasting. Joint manufacturing costs. 7. The opportunity cost of making a component part in a factory with no excess capacity is the: (Points : 2) Variable manufacturing cost of the component. Fixed manufacturing cost of the component. Total manufacturing cost of the component. Cost of the production given up in order to manufacture the component. Net benefit foregone from the best alternative use of the capacity required. 8. Special orders: (Points : 2) Are frequent. Are infrequent. Commonly represent a large part of a firm’s overall business. Can never be profitable to a firm. 9. A profitable company pays $100,000 wages and has depreciation expense of $100,000. The company’s income tax rate is 40%. The after-tax effects on cash flow are a net cash outflow of: (Points : 2) $40,000 for wages and a net cash inflow of $60,000 for depreciation expenses. $40,000 for wages and a net cash inflow of $40,000 for depreciation expenses. $60,000 for wages and a net cash inflow of $60,000 for depreciation expenses. $60,000 for wages and a net cash inflow of $40,000 for depreciation expenses. $40,000 for wages and a net cash inflow of $100,000 for depreciation expenses. 10. You just bought a new car for $125,000. Before you had time to get insurance, the car was wrecked. Weird Wally offers to take it off your hands for $10,000. You can then purchase a similar model for $128,000. A body-shop with an excellent reputation offers to rebuild it for $90,000 and loan you a similar model while the vehicle is being rebuilt. Once rebuilt, the body-shop claims, it will run like a new car and nobody will be able to tell the difference. What would you do from a financial point of view? (Points : 2) Rebuild to save $13,000. Rebuild to save $28,000. Rebuild to save $38,000. Sell to Weird Wally and save $7,000. 11. Operating at or near full capacity will require a firm considering a special order to recognize potentially the: (Points : 2) Opportunity cost from lost sales. Value of full employment. Time value of money. Need for good management. Value of capacity resource management. 12. The excess of the present value of future cash flows over the initial investment outlay for a project is the: (Points : 2) Internal

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