Question : 51. Barney’s Bagels invested in a new oven for $12,000. The : 1208027

 

51. Barney’s Bagels invested in a new oven for $12,000. The oven reduced the amount of time for baking which increased production and sales for five years by the following amounts of cash inflows:
  
Using the averaging method, the payback period for the investment in the oven would be: 
A. 5.0 years.
B. 2.4 years.
C. 2.0 years.
D. 1.7 years.

52. Which of the following statements concerning payback analysis is true? 
A. An investment with a longer payback is preferable to an investment with a shorter payback.
B. The payback method ignores the time value of money concept.
C. The payback method and the unadjusted rate of return are different approaches that will consistently lead to the same conclusion.
D. All of the other answers are correct.

53. Which of the following does not represent an advantage of the unadjusted rate of return over the payback method for evaluating capital projects? 
A. The unadjusted rate of return method considers the investment’s profitability.
B. The unadjusted rate of return method measures the recovery of the initial investment in the project.
C. The unadjusted rate of return is a percentage that can be compared to a stated hurdle rate.
D. All of the other answers are correct.

54. Cash outflows generated by capital investments include all of the following except: 
A. Purchase discounts
B. Transportation costs
C. Increased operating expenses
D. Increases in the amount of working capital

55. Arthur Company is considering a capital project that will return $100,000 each year for five years. At the company’s hurdle rate of 10%, the present value of the annuity is $379,078. What will be the company’s return on investment in Year 1? 
A. $37,908
B. $62,092
C. $100,000
D. None of the other answers are correct.

56. Which capital budgeting technique defines returns in terms of income instead of cash flows? 
A. The unadjusted rate of return method
B. The internal rate of return technique
C. The net present value technique
D. The payback period

57. Eddy Company has an opportunity to purchase an asset that will cost the company $25,000. The asset is expected to add $7,500 per year to the company’s net income. Assuming the asset has a five-year useful life and zero salvage value, the unadjusted rate of return based on the average investment will be: 
A. 60%.
B. 30%.
C. 15%.
D. None of the other answers are correct.

58. Finebaum Company plans to invest in a new operating plant that is expected to cost $600,000. The projected incremental income from the investment is as follows:
  
The unadjusted rate of return on the initial investment would be approximately: 
A. 5.0%.
B. 6.7%.
C. 13.3%.
D. 15.0%.

59. Select the incorrect statement regarding postaudits of capital investment decisions. 
A. A postaudit should be conducted at the end of the project.
B. The postaudit helps management determine whether a project that had been accepted should have been rejected.
C. A postaudit is not necessary for a capital investment selected using a technique that considers the time value of money.
D. The goal of a postaudit is to provide feedback that can be used to improve the accuracy of future capital investment decisions.

60. The purposes of the postaudit for capital investments include all of the following except: 
A. Continuous improvement.
B. Punishment for poor capital investment decisions.
C. Determining whether the project generated the results expected.
D. Ensuring that managers closely scrutinize capital investment decisions.

 

 

Place your order
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more