Reference no: EM132553182

Question 1) The best definition of allocated fixed costs is:

Select one:

a. Fixed costs that can be traced directly to a customer.

b. Fixed costs that differ between alternatives.

c. Fixed costs that cannot be traced directly to a customer.

d. None of the answer choices is correct.

e. Fixed costs that are forgone when one alternative is selected over another.

Question 2) If a project has an internal rate of return of 25% and a negative net present value, which of the following statements is true regarding the discount rate used for the net present value computation?

Select one:

a. The required rate of return must have been less than 25%.

b. None of the answer choices is correct.

c. The required rate of return must have been greater than 25%

d. The required rate of return must have been 0%.

e. The required rate of return must have been equal to 25%.

Question 3) Division A has a building with the same original cost as Division B, except that it was purchased four years before Division B's building. If both divisions have identical operating incomes and use the net book value approach for calculating return on investment (ROI), which of the following will be true?

Select one:

a. Both divisions will have the same ROI.

b. Division A will have a higher ROI.

c. More information is needed to answer this question.

d. None of the answer choices is correct.

e. Division B will have a higher ROI.