15. Which of the following statements concerning payback analysis is true?

All of the other answers are correct.

The payback method ignores the time value of money concept.

An investment with a shorter payback is preferable to an investment with a longer payback.

The payback method and the unadjusted rate of return are different approaches that will not consistently lead to the same conclusion.

16. Cash outflows generated by capital investments include all of the following except:

depreciation expense

increase in the required amount of working capital

transportation costs

increased operating expenses

17.

Which capital budgeting technique defines returns in terms of income instead of cash flows?

The unadjusted rate of return method

The payback period

The net present value technique

The internal rate of return technique

20.

Ford Company had beginning raw materials inventory of $8,100. During the period, the company purchased $46,500 of raw materials on account. If the ending balance in raw materials was $5,100, the amount of raw materials transferred to work in process inventory is:

$49,500.

$51,600.

$43,500.

$46,500.