Questions from Managerial Accounting


Q: Distinguish between the following two types of capital budgeting decisions: acceptance

Distinguish between the following two types of capital budgeting decisions: acceptance-or-rejection decisions and capital-rationing decisions.

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Q: “The greater the discount rate, the greater the present value

“The greater the discount rate, the greater the present value of a future cash flow.” True or false? Explain your answer.

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Q: Briefly explain the concept of discounted-cash-flow analysis.

Briefly explain the concept of discounted-cash-flow analysis. What are the two common methods of discounted-cash-flow analysis?

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Q: State the decision rule used to accept or reject an investment proposal

State the decision rule used to accept or reject an investment proposal under each of these methods of analysis: (1) net-present-value method and (2) internal-rate-of return method.

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Q: Explain the following terms: recovery of investment versus return on investment

Explain the following terms: recovery of investment versus return on investment.

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Q: List and briefly explain two advantages that the net-present-

List and briefly explain two advantages that the net-present-value method has over the internal-rate of-return method.

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Q: List and briefly explain four assumptions underlying discounted-cash-flow

List and briefly explain four assumptions underlying discounted-cash-flow analysis.

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Q: Bay State Community College enrolls students in two departments, Liberal Arts

Bay State Community College enrolls students in two departments, Liberal Arts and Sciences. The college also has two service departments, the Library and the Computing Services Department. The usage o...

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Q: Distinguish between the following approaches to discounted-cash-flow analysis

Distinguish between the following approaches to discounted-cash-flow analysis: total-cost approach versus incremental-cost approach.

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Q: Why is accelerated depreciation advantageous to a business?

Why is accelerated depreciation advantageous to a business?

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