In: Accounting
41. Which of the following can be calculated using built-in functions in spreadsheet programs?
a. |
external rate of return. |
b. |
internal rate of return. |
c. |
investment rate of return. |
d. |
international rate of return. |
42. When using the internal rate of return to evaluate investment alternatives, which rate would analysts specify?
a. |
hurdle rate. |
b. |
Federal funds rate. |
c. |
prime interest rate. |
d. |
time-adjusted rate. |
43. What is a general type of long-term capital investment that companies make?
a. |
replacement and minor improvements |
b. |
training and development of employees |
c. |
advertising campaigns |
d. |
all of the above |
44. Systematic feedback to planners based on audits creates an environment in which planners will find less temptation to
a. |
deflate their estimates of the benefits associated with their pet projects. |
b. |
inflate their estimates of the benefits associated with their pet projects. |
c. |
inflate their estimates of the costs associated with their pet projects. |
d. |
inflate their estimates of the prestige associated with their pet projects. |
45. What should a firm do to reduce the temptation for planners to inflate their estimates of the benefits associated with the project to get it approved?
a. |
conduct regular capital investment post-audits. |
b. |
fire all managers who miss their cost or benefit estimates by more than 10 percent. |
c. |
recognize that the capital budgeting process is based on subjective estimates and that managers cannot control the actual project implementation. |
d. |
promote project managers that have the largest project(s) or number of employees. |