Exam 4 / Final Review

Question 1

NPV

Answer 1

= Present Value Cash Inflow / Initial Investment

Question 2

Profitability Index

Answer 2

= Present Value / Initial Investment

Question 3

If an investment projects IRR is higher then the company required rate of return. Then the company should reject the investment

Answer 3

False

Question 4

Net Present Value of An Investment

Answer 4

Cashflows x Rate - Initial Investment

Question 5

Payback Period

Answer 5

Initial Investment / Cash Flow

Question 6

Direct Materials Price Variance

Answer 6

Actual Quantity Purchased x (Actual Price - Standard Price)

Question 7

Direct Materials Quantity Variance

Answer 7

Standard Price x (Actual Quantity Used - Standard Quantity Allowed)

Question 8

Direct Labour Rate Variance

Answer 8

Actual Hours x (Actual Rate - Standard Rate)

Question 9

Direct Labor Efficiency Variance

Answer 9

Standard Rate x (Actual Hours - Standard Hours Allowed)

Question 10

Standard Costs Help Motivate employees by serving as benchmarks against which their performance is measured.

Answer 10

True