Q1 - A(n) ____________ cost is the net cash inflow that could be obtained if the resources committed to one action were used in the most desirable other alternative.

A- Avoidable

B-Contribution margin

C-Outlay

D-Opportunity

Q2- If a cost is identical under each alternative under consideration within a given decision context, the cost is considered:

A- A sunk cost

B- An opportunity cost

C- An outlay cost

D- An irrelevant cost

Q3 - A company loses revenues from regular customers by accepting a special order when operating at capacity. The loss of revenue just described is an example of which of the following?

A- A revenue cost

B- A sunk cost

C- An opportunity cost

D- An unavoidable cost

Q4- Long Horn Medical Services is considering an investment of $100,000. Data related to the investment and present value factors are as follows:

Year	Cash Inflows	Present Value of $1.00
1	$50,000	0.85
2	46,000	0.72
3	60,000	0.61
4	80,000	0.52
5	50,000	0.44

Q5- The following is a disadvantage of the payback period method:

A- It does not take into account the time value of money

B- There is no consideration of cash flows after the payback period

C- There is no consideration of the timing of cash flows

D- Both A and B are disadvantages of this method

Q6- _______________ involve(s) investment of significant financial resources in projects to develop or introduce new products or services, to expand current production or service capacity, or to change current production or service facilities.

A- Capital budgeting

B- Capital expenditures

C- Long range planning

D- Profitability analysis

Q7- Project A has a predicted payback period of 2.5 and Project B has a predicted payback period of 5. Based on this information we can conclude:

A- Project A is preferred to Project B

B- Project B provides twice the return of Project A

C- Project B is preferred to Project A, but it is not necessarily twice as profitable

D- More information should be gathered before deciding on which project, if either, is desirable