Question 37

1. A properly constructed segmented income statement in a contribution format would show that the segment margin of the East business segment is:

   Answer

   		$288,000
   		$279,000
   		$108,000
   		$441,000

Question 38

1. Accounts receivable arising from sales to customers amounted to $35,000 and $40,000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $150,000. Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows is

   Answer

   	A.	$185,000.
   	B.	$145,000.
   	C.	$155,000.
   	D.	$150,000.

Question 39

1. If a project has a negative net present value, its profitability index will be

   Answer

   	A.	less than one.
   	B.	undeterminable.
   	C.	one.
   	D.	greater than one.

Question 40

1. I DID COMPLETE ALL ASSIGNED HOMEWORK BUT DID NOT SUBMIT IT. THE WORK WAS CHECKED AGAINST THE SOLUTIONS GONE OVER IN CLASS BY THE INSTRUCTOR. CHECK "YES" ONLY IF YOU COMPLETED THE WORK; OTHERWISE, YOU NEED TO CHECK "NO".

   Answer

   		YES
   		I DON'T REMEMBER.
   		MAYBE SO.
   		NO.

Question 41

1. Present Value of an Annuity of 1

   Periods	8%	9%	10%
   1	.926	.917	.909
   2	1.783	1.759	1.736
   3	2.577	2.531	2.487

   Reference: Ref 12-3

   A company has a minimum required rate of return of 8%. It is considering investing in a project that costs $68,337 and is expected to generate cash inflows of $27,000 each year for three years. The approximate internal rate of return on this project is

   Answer

   	A.	less than the required 8%.
   	B.	10%.
   	C.	8%.
   	D.	9%.

Question 42

Which of the following is based directly on accrual accounting data rather than cash flows?

Answer

	A.	Internal rate of return
	B.	Annual rate of return
	C.	Net present value
	D.	Profitability index