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The document contains sample questions about budgeting, correlation, time value of money, regression analysis and other finance and accounting topics. Multiple choice answers are provided for each question. The questions cover concepts like cash budgets, production budgets, correlation, net present value, internal rate of return, regression equations, accounts receivable and more.

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162 views

Sample

The document contains sample questions about budgeting, correlation, time value of money, regression analysis and other finance and accounting topics. Multiple choice answers are provided for each question. The questions cover concepts like cash budgets, production budgets, correlation, net present value, internal rate of return, regression equations, accounts receivable and more.

Uploaded by

minhphuc0177
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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A firm has produced the following budget for an activity level of 200,000 units: $45,000 of

Direct Materials cost, $80,000 of Direct Labour cost, and $70,000 of Fixed Production
Overheads. What would be the total cost for a level of activity of 225,000 units?
a) $210,625
b) $219,375
c) $221,775
d) $213,685
Cash budget is NOT based on:
a. Sales budget
b. Production budget
c. Capital Expenditure budget
d. Varialble Overheads budget
Which of the following is not needed in preparing a production budget?
a) Opening balance of inventory
b) Closing balance of inventory
c) Sales
d) Production cost per unit
When correlation is 1 (r=1), all the points in a scatter diagram would lie:
a. on a straight line directed from lower left to upper right.
b. on a straight line directed from upper right to lower left.
c. on a straight line
d. on a curved line
The correlation between shoe-size and intelligence should be close to:
a) 0
b) 1
c) -1
d) 0.5 or -0.5
f dataset A of (X,Y) data has correlation coefficient r = 0.85, and a second
dataset B has correlation r = –0.85, then:
a. The points in A exhibit a stronger linear association than B.
b. The points in B exhibit a stronger linear association than A.
c. Neither A nor B has a stronger linear association.
d. You can’t tell which dataset has a stronger linear association without seeing
the data or seeing the scatter diagram.
Which of the following correlation coefficients show the weakest relationship between
two variables?
a) 0.95
b) 0
c) -0.95
d) -1
Investment’s profitability is totally ignored in:
a. payback period method
b. net present value method
c. internal rate of return method
d. trial and error method
If nominal rate of return is 10% per annum and annual effective rate of interest is
10.38129% per annum, the frequency of compounding is:
a) monthly
b) quarterly
c) semi-annually
d) weekly
A cost incurred in the past and cannot be changed or recovered by any future action is:
a. a sunk cost
b. an opportunity cost
c. an incremental cost
d. a relevant cost
An asset costs $200,000 with a $20,000 salvage value at the end of its ten-year life. If
annual cash inflows are $35,000 (give that the first cash inflow occurs at the end of the
first year), the cash payback period is:
a) between 5 to 6 years
b) 6,25 years
c) between 6 to 7 years
d) more than 11 years
ABC Company has an 8% required rate of return. It’s considering a project that would
provide annual cost savings of $18,000 for 3 years. The most that ABC would be willing
to spend on this project is:
a. $46,387.75
b. $50,098.77
c. unable to be determined due to not having the internal rate of return.
d. unable to be determined due to not having capital expenditure amount.
ABC Company recently invested in a project with a 3-year life span. The initial
investment was $30,120 and annual cash inflows were $14,000 for year 1; $16,000 for
year 2; and $18,000 for year 3. The company expects a 12% required rate of return.
What is the net present value for the project?
a) $7,947.15
b) $12,515.2
c) $0
d) $42,635.2
ABC Company is considering a project that calls for an initial capital investment of
$50,000. The expected net cash inflows from the project are $7,791 for each of 10 years.
What is the internal rate of return of the project?
a. 6%
b. 7%
c. 8%
d. 9%
In a F2 (part 2) course, a linear regression equation was computed to predict the final
exam score from the score on the mid-term test. The equation was Y = 8 + 0.8X where
Y is the final exam score and X is the score on the first test. Tom's final exam score is
predicted to be 62. What was his mid-term score?
a) 67.5
b) 57.6
c) 87.5
d) 41.6
There is a dataset as followed: (1,2), (3,5), (4,6), (6,9), (8, 10). Applying the Least
Squares method, the linear regression model is:
a. Y = 1.17X + 1.25
b. Y = 1.25X + 1.17
c. Y = -1.17X + 1.25
d. Y = 1.25X - 1.17
There is a dataset as followed: (1,2), (2,2), (3,6), (5,9), (6, 8). The coefficient of
correlation of the dataset is:
a) 0.9245
b) 0.8547
c) 0.8823
d) unable to be determined.
The production budget of ABC Ltd. calls for 60,000 units to be produced. If it takes 45
minutes to make one unit and the direct labor rate is $15 per hour, what is the total
budgeted direct labor cost?
a. $675,000
b. $405,000
c. $523,500
d. Cannot be determined
ABC Company has sales of $600,000 in January. Past experience suggests that 40% of
sales is cash sale. Of its credit sales, 55% is paid in the month following the sale, and
40% is paid in the second month following the sale. The rest is bad debt. The amount of
cash collection from January sales in February is:
a) $198,000
b) $132,000
c) $330,000
d) $144,000
Bruno Industries expects credit sales for January, February, and March to be $200,000,
$260,000, and $300,000, respectively. It is expected that 55% of the sales will be
collected in the month of sale, 35% will be collected in the following month, and 10%
will be collected in the second month after the sales. Closing balance of Accounts
Receivable at the end of March is expected to be:
a. $161,000
b. $121,000
c. $155,000
d. $135,000

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