Reference no: EM132775951

Problem 1: The normal selling price is equal to the cost amount per unit minus markup.

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True

False

Problem 2: A differential income indicates that a decision is expected to decrease income.

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True

False

Problem 3: The present value of an amount is equal to the value today of an amount to be received in the future.

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True

False

Problem 4: When the net present value is positive, the present value index is less than 1.

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True

False

Problem 5: In a cost variance analysis, if actual cost is more than budgeted cost, then the variance is favorable.

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True

False

Problem 6: For an investment with an initial of $200,000 and net present value of cash flow of $202,900, the present value index is less than 1.

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True

False

Problem 7: When analyzing costs, if actual costs are higher than standard costs, the variance is favorable.

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True

False

Problem 8: In setting up a product normal selling price, only the cost of manufacturing the product (product costs) are included in the cost per unit.

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True

False

Problem 9: Setting up a product selling price involves estimating the product cost per unit and a markup.

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True

False

Problem 10: The Present Value Index is the amount to be invested divided by the present value of the net cash flow.

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True

False

Problem 11: An investment is considered good if the present value index is greater than 1.

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True

False

Problem 12: The Average rate of return is a capital investment analysis method that uses present values.

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True

False

Problem 13: A company should always discontinue a non profiting business segment without conducting any differential analysis.

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True

False