TRUE OR FALSE?

1. A consideration of risk may be incorporated into capital budgeting techniques in a number of ways. One way is through the use of scenario analysis. 2. A conclusion that the percent of change a person's grade on the CPA Exam will increase as the number of hours studied for the exam increases is a result of regression analysis. 3. In a period of recession, actual GDP exceeds potential GDP. 4. ABC Co. is considering the purchase of equipment for P40.000. This investment will generate annual cash inflows of P10,000 per year for the next 6 years. The company desires a rate of return of 12%. At that rate, the present value of P1 in six years is .507. At that rate, the present value of an ordinary annuity of P1 over six years is 4.111. The investment has a positive net present value of P1.1101. In January. ABC Co. spends P14,000 to manufacture 8.000 units of a product. The following month the company produces 5,000 more units at a cost of P9.500, Using the high-low method, the fixed cost for manufacturing this item is P2,000. 2. The balanced scorecard is best characterized as a financial report card for ABC Co. 3. A demand curve shift occurs when the price of the product changes. 4. The strategic objectives component of the balanced scorecard is a statement of what the strategy must achieve and what is critical to its success.1. A zero-balance account is designed to reduce the float in cash receipts. 2. Cyclical unemployment can be reduced by training employees in new skills, 3. ABC Co. is considering establishing a concentration banking system that will speed up receipts from customers by 2 days. Assuming that the company's average daily collections are P50.000, maintenance and transfer fees are P6.000 per year and the company's short- term cost of funds is equal to 4%. the company should not establish the concentration banking system. 4 Demand-pull inflation occurs at high-levels of economic activity