Question
36. (Ignore income taxes in this problem.) Highpoint, Inc. is considering investing in automated equipment with a ten-year useful life. Managers at Highpoint have estimated
36. (Ignore income taxes in this problem.) Highpoint, Inc. is considering investing in
automated equipment with a ten-year useful life. Managers at Highpoint have estimated the cash flows associated with the tangible costs and benefits of automation, but have been unable to estimate the cash flows associated with the intangible benefits. Using the company's 12% required rate of return, the net present value of the cash flows associated with just the tangible costs and benefits is a negative P282,500. How large would the annual net cash inflows from the intangible benefits have to be to make this a financially acceptable investment?
a. P20,000
b. P28.250
c. P35,000
d. P50,000
38. (Ignore income taxes in this problem.) Given the following data on a proposed investment project:
Cost of equipment required P50,000
Working capital required P30,000
Salvage value of equipment P-0-
Annual cash inflows from the project P20,000
Required rate of return 20%
Life of the project 8 years
The net present value of the project would be
a. P3,730
b. P -0-
c. P32,450
d. P88,370
40. (Ignore income taxes in this problem.) Given the following data:
Investment required P15,000
Annual cash inflow P 2,500
Life of the project 10 years
The internal rate of return interpolated to the nearest tenth of a percent is
a. 10.6%
b. 9.4%
c. 11.4%
d. 11.1%
41.Managerial accounting is the branch of accounting concerned with reporting to
a. creditors
b. the government
c. internal managers
d. stockholders
42.Managerial accounting reports are:
a. less specific than financial accounting reports
b. more specific than financial accounting reports
b. very similar to financial accounting reports
d. required to be identical for all organizations
44. Which of the following statements pertaining to management accounting is not true?
a. Management accounting makes use of data resulting from the financial accounting system
b. Management accounting provides that information essential for planning, evaluating, and controlling the strategies, tactics, and operations of an organization
c. Accountability as a concept in management accounting refers to the identification of elements or activities which management can or cannot influence, assessment of risks and sensitivity factors to facilitate the use of data for the control, evaluation and corrective functions of management
d. Managerial accounting is the branch of accounting concerned with reporting to external parties for decision making purposes
48.Financial accounting and managerial accounting may be thought of as reporting, respectively:
a. past financial performance, future financial outcomes
b. past financial performance for both
c. future financial outcomes, and past financial performance
d. future financial outcomes for both
49.The major functions of management include all but which of the following?
a. Planning
b. Preparing budget reports
c. Controlling
d. Decision making
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