Objective type questions on Capital Budgeting and stocks
1. A company has $5,000,000 to spend on capital projects. Based on the following analysis which project should they select?
Project Cost of Project NVP
A $1,000,000 $1,000
B $1,500,000 $1,500
C $3,000,000 $4,000
D $1,000,000 $0
E $500,000 $750
a. A,B,C, and E
b. A, C, and D
c. B, C, and E
d. B, C, and D
2. Price ceilings and price floors:
a. Cause surpluses and shortages in markets respectively
b. Causes shortages and surpluses in markets respectively
c. Cause demand and supply curves to shift
d. Are government actions that have no result on the market
3. If unearned revenues are initially recorded in revenue accounts and have not all been earned at the end of the accounting period, then failure to make an adjusting entry will cause:
a. Liabilities to be overstated
b. Revenues to understated
c. Revenues to overstated
d. Accounts receivable to be overstated
4. By providing benefits to both buyers and sellers, marketing seeks to discover the needs and wants to prospective customers and to:
a. Change them
b. Satisfy them
c. Take advantage of them
d. Define real and artificial buying situations
5. According to Douglas McGregor, the assumption that people dislike work, avoid responsibility, and need to be controlled and directed to achieve organizational goal is consistent with which of the following?
a. Theory X
b. Theory Y
c. Two-factor theory
d. Negative reinforcement
6. All of the following statement are TRUE about developing Pro Forma Income Statement EXCEPT:
a. The sales forecast is the first step in developing a pro forma income statement
b. The pro forma balance sheet must be developed before you can develop the pro forma income statement
c. The prior balance sheet should not be used to help develop the pro forma statements
d. The production plan is developed after sales forecast
7. GDP includes:
a. Intermediate buy not final products
b. Substitute buy not intermediate products
c. Final but not intermediate products
d. Complimentary but not intermediate products
8. If stock is issued for a noncash assets, the asset should be recorded on the books of the corporation at:
a. Fair market value
b. Cost
c. Zero
d. A normal amount
9. An automobile manufacturer wanted to sell its SUV model in Japan. The SUV is priced in U.S. dollars at about $23,000. However, when the vehicle reaches the Japanese showrooms, its price is over 36,000 Japanese yen, and consumers cannot afford to buy it. The price was set without regard for the:
a. Balance of price
b. Currency change rate
c. Reciprocity price
d. Balance of payment
10. Blake & Mouton's Leadership Grid measures the degree to which a leader:
a. Is employee-centered and job centered
b. Emphasizes consideration and initiating structure
c. Is relationship-oriented and task-oriented
d. Displays concern for people and concern for production