Financial Decision-Making

Assume the required rate of return increases to 20%. The net present value of the investment would a. increase b. decrease c. stay the same d. become negative e. both “b” and “d”, above.

Corporate form of business organization

7.Which of the following characteristics is most important factor contributing to the growth of the corporate form of business organization: a. There is no distinction between the officers of the company and the owners of the company because they are one and the same. b. Limited legal liability. c. Profits are generally taxed only once. d. Relatively simple legal structure e. None of the above.

Financial Management

8. If setup activity costs are $360,000, number of setups is 1,800, direct labor hours are 60,000, and machine hours are 36,000, then the setup activity cost driver rate, using the best cost driver for this situation, is : (a) $200 per setup (b) $6 per direct labor hour (c) $10 per machine hour (d) there is no appropriate cost driver rate

Financial Management

9. What activity measure would be most appropriate cost driver for estimating the cost of cleaning the rooms in a hotel? (a) the number of registered guests (b) the number of hours required to clean the rooms (c) the number of personnel required to clean the rooms (d) pay rates of cleaning personnel

Financial Management

(Please show work) 10. Support costs have increased in today’s manufacturing environment because: (a) managers have let them get out of control (b) there is now a shift toward greater automation (c) fewer direct materials are being used in production (d) direct labor costs have increased