1. Which of the following is not an advantage of variable costing over absorption costing?

A) Cost information under variable costing is ready for CVP analysis

B) Income under variable costing can be used for external reporting

C) Income under variable costing follows sales volume

D) Variable costing is always more advantageous

2. Future benefits foregone when one option is chosen over another are called:

A) Future Costs

B) Sunk Costs

C) Relevant Costs

D) Opportunity Costs

10. If a project requires an initial investment of $1,000,000 and will return $1,263,376. after two years, what's the internal rate of return of the project?

A) 11.4%

B) 11.6%

C) 12.4%

D) 12.6%

4. Project A requires an initial investment of $40,000 and will return $10,000 annually at the end of each year for 10 years. Project B requires an initial investment of $80,000 and will return $40,000 annually beginning the end of year 3 for 5 years. Which of the following regarding cash payback period is correct? (3 pts)

A)Project A has a shorter cash payback period

B) Project B has a shorter cash payback period

C)Project A and project B have the same cash payback period

5. Which of the following is true regarding depreciation tax shield? (3 pts)

A) It is calculated as depreciation x (1 -tax rate) and increases tax payment

B) It is calculated as depreciation x tax rate and increases tax payment

C) It is calculated as depreciation x (1-tax rate) and decreases tax payment

D) It is calculated as depreciation and decreases tax payment