ACCT 434 Week 6 Quiz – DeVry



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ACCT 434 Week 6 Quiz – DeVry

1. (TCO 9) To guide cost allocation decisions, the benefits-received criterion (Points : 5)

2. (TCO 9) Which cost-allocation criterion is MOST likely to subsidize poor performers at the expense of the best performers? (Points : 5)

3. (TCO 9) The MOST likely reason for NOT allocating corporate costs to divisions include that (Point : 5)

4. (TCO 9) Identifying homogeneous cost pools (Points : 5)

5.(TCO 9) The Hassan Corporation has an electric mixer division and an electric lamp division. Of a $20,000,000 bond issuance, the electric mixer division used $14,000,000 and the electric lamp division used $6,000,000 for expansion. Interest costs on the bond totaled $1,500,000 for the year. Which corporate costs should be allocated to divisions? (Points : 5)

6.(TCO 10) The capital budgeting method, which calculates the expected monetary gain or loss from a project by discounting all expected future cash inflows and outflows to the present using the required rate of return, is the (Points : 5)

7. (TCO 10) Assume your goal in life is to retire with $1.5 million. How much would you need to save at the end of each year if interest rates average 5% and you have a 25-year work life? (Points : 5)

8. (TCO 10) The net-present-value method focuses on (Points : 5)

9. (TCO 10) A “what-if” technique that examines how a result will change if the original predicted data are not achieved or if an underlying assumption changes is called (Points : 5)

10. (TCO 10) Upper Darby Park Department is considering a new capital investment. The following information is available on the investment. The cost of the machine will be $150,000. The annual cost savings if the new machine is acquired will be $40,000. The machine will have a 5-year life, at which time the terminal disposal value is expected to be $20,000. Upper Darby Park Department is assuming no tax consequences. If Upper Darby Park Department has a required rate of return of 10%, which of the following is closest to the present value of the project? (Points : 5)