Reference no: EM132516489

Question 1: The book value of a machine is a valuable asset when it is presented on the balance sheet for external reporting, however, the cost of such an asset may be considered irrelevant in most internal decision-making. Explain how and why this might be true.

Question 2: Why are present values, taxes and interest rates of such importance in Capital Budgeting? What is the tax shield on CCA? Why is it important?

Question 3: What is the purpose of Ratio Analysis? List two of the groups of people inside or out- side the organization who use it, and state what kind of information they each derive from it, and for what purpose.

Question 4: In order to make good decisions, management must be aware of which costs are rele- vant costs for decision making. For this reason, it is important to recognize how certain costs behave under changing conditions.

Question 5: Give one example of a situation in which a fixed costs may be relevant and one when a fixed cost may not be relevant. Give an example of when a variable cost might not be relevant.

Question 6: Good management of any organization is not possible without good cost information and a proper and efficient control system. Explain Planning and Control and the role of the management accountant