The process of analyzing the sales mix
The process by which management plans, evaluates and controls investments in fixed assets
The process by which management plans, evaluates and controls investments in other company' s stock.
The process of analyzing financing options.
They involve investments of an immaterial amount.
They involve investments that earn a reasonable rate of return
They affect operations for many years.
They involve the long-term commitment of funds.
Internal rate of return
Net present value
Discounted cash flow
Average rate of return
Direct costing decisions
Capital investment analysis.
Incremental analysis.
Absorption cost analysis.
18%
15%
27%
9%
5 years
4 years
6 years
3 years
Average rate of return
Cash payback method
Accounting rate of return
Internal rate of return method
$19,800
$17,075
$15,900
$22,725
Positive $16,400.
Positive $25,200.
Negative $99,600.
Negative $126,800.
Manufacturing productivity.
Manufacturing fixed assets
Manufacturing flexibility
Manufacturing control
Interest deduction
Alternative minimum tax provision
Minimum tax provision
Depreciation deduction
Ignore the fact that Proposal A has a useful life of five years and treat it as if it has a useful life of eight years
Adjust the life of Proposal A to a time period that is equal to that of Proposal B by estimating a residual value at the end of year five
Ignore the useful lives of five and eight years and find an average (6 1/2 years).
Ignore the useful lives of five and eight years and compute the average rate of return
The federal income tax
Current fixed asset levels
Changes in price levels.
Qualitative factors
Ranking of the proposals.
Determination of whether the project should be funded by using operating cash or the issuance of bonds
Establishing of minimum standards by applying the cash payback and the average rate of return.
Evaluation of qualitative factors
Income tax considerations
Changes in price level
Equal proposal lives
Lease versus capital investment
They involve the long-term commitment of funds.
They affect operations for many years.
They involve some of the most important business decisions that management makes
They involve investments of an immaterial amount
Absorption cost analysis
Full costing analysis
Capital investment analysis
Cost-volume-profit analysis.
Direct costing decisions
Capital investment analysis
Incremental analysis
Absorption cost analysis
Internal rate of return and average rate of return
Net present value and average rate of return
Internal rate of return and net present value
Average rate of return and cash payback method
28%
14%
56%
12.5%
5 years
4 years
6 years
3 years
$13,500
$14,145
$15,500
$12,600
$5,360
$352
$25,360
$4,296
1.45
1.08
1.14
.7
Net present value of the investment
Employee morale.
The impact on product quality.
Manufacturing flexibility.
Average rate of return of the project.
Employee morale
The impact on product quality.
Manufacturing flexibility
Periods in time that experience decreasing price levels
Periods in time that experience increasing price levels
Periods of time with serious economic downturns
Periods of time with improving economic results
Qualitative factors
Changes in price levels
The age of the current fixed assets
The federal income tax.
Ranks the proposals with the available funds
Verify the best financing option available
Establish minimum standards by applying the cash payback and the average rate of return
Qualitative factors are considered
Present value calculations
Factors other than financial factors
Maximum cost of the project
Net cash flow of the project