1.The process of analyzing alternative investments and deciding which assets to acquire or sell is known as:

a. Planning and Control

b. Capital budgeting

c. Variance analysis

d. Master budgeting

e. Managerial accounting

2. The calculation of annual net cash flow from a particular investment project should include all of the following except:

A. Income taxes.

B. Revenues generated by the investment.

C. Cost of products generated by the investment.

D. Depreciation expense.

E. General and administrative expenses.

3. Capital budgeting decisions are risky because all of the following are true except:

A. The outcome is uncertain.

B .Large amounts of money are usually involved.

C. The investment involves a long-term commitment.

D. The decision could be difficult or impossible to reverse.

E. They rarely produce net cash flows.

4.A the company's required rate of return, typically its cost of capital is called the:

A.Internal rate of return.

B. Average rate of return.

C. Hurdle rate.

D. Maximum rate.

E. Payback rate.

5. In business decision making, managers typically examine the two fundamental factors of:

A. Risk & capital investment.

B. Risk & return.

C. Capital investment & rate of return.

D. Risk & payback.

E. Payback & rate of return.