19. A financial analyst in Bookman's Book Company just analyzed a capital budgeting project and realized that the IRR of 12% on the project was identical to the company's discount rate of 12%. Which of the following is true regarding the net present value of the project? A. The NPV of the project is positive B. The NPV of the project is zero C. The NPV of the project is negative D. More information is needed to answer the question 20. When a company's discount rate increases, which of the following is true for a project that currently has a net present value of $105,325.69 and an IRR of 15.66%? A. The company's IRR will increase B. The company's IRR will decrease C. The company's net present value will increase D. The company's net present value will decrease 21. Which of the following is a period cost for a computer manufacturer: A. Wages for assembly line workers B. Glue for computers C. Rent for factory building D. None of the above 22. If the LHK Company had a per unit cost that was $5 when 400 units were produced and a per unit cost of $4 when 500 units were produced, the cost is a A. Variable cost of $5 per unit B. Fixed cost of $2,000 C. Mixed cost of $5 per unit variable cost and $400 fixed cost D. Mixed cost of $4 per unit variable cost and $400 fixed cost 23. Which of the following would be included as a cash disbursement on a cash budget? A. Fixed asset purchases B. Depreciation C. Borrowings from a bank D. Both A & C 12
19. A financial analyst in Bookman's Book Company just analyzed a capital budgeting project and realized that the IRR of 12% on the project was identical to the company's discount rate of 12%. Which of the following is true regarding the net present value of the project? A. The NPV of the project is positive B. The NPV of the project is zero C. The NPV of the project is negative D. More information is needed to answer the question 20. When a company's discount rate increases, which of the following is true for a project that currently has a net present value of $105,325.69 and an IRR of 15.66%? A. The company's IRR will increase B. The company's IRR will decrease C. The company's net present value will increase D. The company's net present value will decrease 21. Which of the following is a period cost for a computer manufacturer: A. Wages for assembly line workers B. Glue for computers C. Rent for factory building D. None of the above 22. If the LHK Company had a per unit cost that was $5 when 400 units were produced and a per unit cost of $4 when 500 units were produced, the cost is a A. Variable cost of $5 per unit B. Fixed cost of $2,000 C. Mixed cost of $5 per unit variable cost and $400 fixed cost D. Mixed cost of $4 per unit variable cost and $400 fixed cost 23. Which of the following would be included as a cash disbursement on a cash budget? A. Fixed asset purchases B. Depreciation C. Borrowings from a bank D. Both A & C 12
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:19. A financial analyst in Bookman's Book Company just analyzed a capital budgeting project and
realized that the IRR of 12% on the project was identical to the company's discount rate of 12%. Which
of the following is true regarding the net present value of the project?
A. The NPV of the project is positive
B. The NPV of the project is zero
C. The NPV of the project is negative
D. More information is needed to answer the question
20. When a company's discount rate increases, which of the following is true for a project that currently
has a net present value of $105,325.69 and an IRR of 15.66%?
A. The company's IRR will increase
B. The company's IRR will decrease
C. The company's net present value will increase
D. The company's net present value will decrease
21. Which of the following is a period cost for a computer manufacturer:
A. Wages for assembly line workers
B. Glue for computers
C. Rent for factory building
D. None of the above
22. If the LHK Company had a per unit cost that was $5 when 400 units were produced and a per unit
cost of $4 when 500 units were produced, the cost is a
A. Variable cost of $5 per unit
B. Fixed cost of $2,000
C. Mixed cost of $5 per unit variable cost and $400 fixed cost
D. Mixed cost of $4 per unit variable cost and $400 fixed cost
23. Which of the following would be included as a cash disbursement on a cash budget?
A. Fixed asset purchases
B. Depreciation
C. Borrowings from a bank
D. Both A & C
12
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