Wrong Answers Flashcards
Where is the break even point on a P/V Chart?
The point where the profit line cuts the horizontal axis.
Where is the break even point on a break even chart?
The point where the total cost line and the total sales revenue line intersect
How to calculate IRR from a perpetuity?
IRR = Annual Cash inflow / Initial Investment
How to calculate IRR of an annuity?
Step 1: Calculate discount factor: Inital investment / Annual cash flow
Step 2: Look up closest discount factor in annuity table to give estimated value.
How to calculate Payback period for constant annual cash flow?
Initial Investment / Annual cash flow
How to calculate present value of cash flows of perpetuity starting immediately?
1 + (1/Rate) * cash flow.
What is true regarding global management accounting principles?
The principles should be used by MAs as a guide to best practice.
One of the key aims of the principles is to encourage integrated thinking within organisations.
Where is the fixed cost located on a P/V Chart?
The beginning of the slope.
What are the 3 types of probability?
Exact: Applies to a population (probability of drawing a red ball out of a bag of balls.)
Empirical: Derived from recorded historical observations (the probability of a certain number of customers visiting a shop.)
Subjective: Based on judgment (Probability of finding diamonds in a particular geological area.)
What is true of a normal distribution?
The mean, mode and median will be equal.
The distribution is symmetrical about the mean.
The width of the normal distribution is approximately equal to three standard deviations above and below the mean.
What is the difference between discrete and continuous data?
Discrete: Can only hold certain values
Continuous: Can hold any value
What does the budget manual contain?
Information about the preparation process but not details specific to any budget period (Eg, no sales demand figures)
What are the global management accounting principles?
Influence
Trust
Relevance
Value
