Question :
51. When making a decision, which of the following should not : 1295518
51. When making a decision, which of the following should not be considered?
A. Relevant costs
B. Opportunity costs
C. Sunk costs
D. Risk
52. Which of the following is not true with regard to opportunity costs?
A. They are the benefits forgone by selecting one alternative over another.
B. They are relevant.
C. They are sometimes difficult to quantify.
D. They have already occurred in the past.
53. You are now considering your housing options for next semester. If the cost of a dorm room and the cost of an apartment are exactly the same, housing costs are:
A. sunk costs.
B. an opportunity cost.
C. not relevant.
D. relevant.
54. You are now considering your housing options for next semester. If the cost of a dorm room and the cost of an apartment are the same, but the apartment is larger, then:
A. both cost and size are relevant.
B. neither cost nor size are relevant.
C. cost is relevant but size is not.
D. size is relevant but cost is not.
55. You are considering your housing options for next semester. The cost of a dorm room and the cost of an apartment are the same. You paid a $50 non-refundable deposit to live in the dorm last year. This deposit is an example of a(n):
A. opportunity cost.
B. relevant cost.
C. sunk cost.
D. avoidable cost.
56. Which of the following would be an irrelevant cost?
A. Future costs that differ among alternatives.
B. Benefits foregone be choosing one alternative over another.
C. Costs that have already been incurred.
D. Costs that are avoidable.
57. Which of the following statements about risk in decision-making is not true?
A. It may be taken into account by adjusting the discount rate used in time value of money calculations.
B. It may be taken into account with the use of sensitivity analysis.
C. Decision-makers will factor in risk equally in their decisions.
D. Most decisions involve risk in some capacity.
58. Which of the following statements about risk is correct?
A. Risk is usually not relevant to most business decisions.
B. Risk may be adjusted for by using sensitivity analysis.
C. Risk is easy to measure and quantify.
D. Most decision-makers will measure risk in exactly the same way.
59. Risk:
A. never affects decision-making.
B. is not a consideration in the decision-making model.
C. can be eliminated by adjusting the discount rate used in the decision-making model.
D. can be adjusted for by considering the probability that certain events will occur.
60. Sensitivity analysis:
A. is a quantitative method of evaluating a decision-maker’s sensitivity to ethical situations.
B. is the process of changing the values of key variables in decision-making to determine how sensitive decisions are to those changes.
C. is the decision-making process of adjusting the discount rate used in time value of money calculations.
D. does not take risk into account.
61. All of the following statements about enterprise risk management (ERM) are true except?
A. ERM helps ensure that companies comply with laws and regulations.
B. ERM helps companies meet their tax and financial reporting requirements.
C. ERM helps companies address one type of risk at a time so that managers do not become overwhelmed.
D. ERM is a systematic approach to identifying and managing risks faced by companies.
62. Which of the following must explicitly be considered in order to implement ERM effectively?
A. the company’s risk appetite
B. how well the company manages risk in a non-ERM environment
C. the company’s reputation
D. all of the above must be considered
63. Which of the following statements is true regarding ethics in decision-making?
A. Since most business decisions are simply a matter of economics, ethical considerations should be ignored.
B. Decision-making can have an ethical as well as an economic impact.
C. Managerial accountants do not face ethical issues.
D. Business managers will always agree on ethical choices.
64. Which of the following should not be taken into account in decision-making?
A. Risk
B. Ethical considerations
C. Irrelevant costs
D. Opportunity costs
