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problem1: In a sell or process further decision, an avoidable fixed production cost incurred after the split-off point is relevant to the decision.

[A] False

[B] True

problem2: When discounting cash flow methods of capital budgeting are used, the working capital required for a project is ordinarily counted as a cash outflow at the beginning of the project and as a cash inflow at the end of the project.

[A] False

[B] True

problem3: The salvage value of new equipment should not be considered when using the internal rate of return method to evaluate a project.

[A] False

[B] True

problem4: When a company has a production constraint, the product with the highest contribution margin per unit of the constrained resource should be given the highest priority.

[A] False

[B] True

problem5: In the payback method, depreciation is added back to net operating income when calculating the net annual cash flows.

[A] False

[B] True

Cost Accounting, Accounting

  • Category:- Cost Accounting
  • Reference No.:- M922211

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