Question 1

The accounting break-even production quantity for a project is 11,640 units. The fixed costs are $216,000 and the contribution margin per unit is $28. The fixed assets required for the project will be depreciated on straight-line basis to zero over the project's 5-year life. What is the amount of fixed assets required for this project?

Accepted Answer

A)  $325,920
B)  $549,600
C)  $748,500
D)  $1,080,000
E)  $1,629,600F) D) and E)
G) None of the above

Question 2

Which one of the following types of analysis is the most complex to conduct?

Accepted Answer

A)  scenario
B)  break-even
C)  sensitivity
D)  degree of operating leverage
E)  simulationF) A) and C)
G) D) and E)

Question 3

Which one of the following represents the level of output where a project produces a rate of return just equal to its requirement?

Accepted Answer

A)  capital break-even
B)  cash break-even
C)  accounting break-even
D)  financial break-even
E)  internal break-evenF) D) and E)
G) B) and E)

Question 4

Which one of the following statements concerning variable costs is correct?

Accepted Answer

A)  Variable costs minus fixed costs equal marginal costs.
B)  Variable costs are equal to fixed costs when production is equal to zero.
C)  An increase in variable costs increases the operating cash flow.
D)  Variable costs are inversely related to fixed costs.
E)  Variable costs per unit are inversely related to the contribution margin per unit.F) C) and E)
G) B) and E)

Question 5

An analysis which combines scenario analysis with sensitivity analysis is called _____ analysis.

Accepted Answer

A)  forecasting
B)  combined
C)  complex
D)  simulation
E)  break-evenF) A) and B)
G) C) and D)

Question 6

Wexford Industrial Supply is considering a new project with estimated depreciation of $26,000, fixed costs of $79,000, and total sales of $187,000. The variable costs per unit are estimated at $11.80. What is the accounting break-even level of production?

Accepted Answer

A)  4,871 units
B)  5,333 units
C)  5,415 units
D)  6,949 units
E)  7,248 unitsF) A) and B)
G) None of the above

Exam 11: Project Analysis and Evaluation

Correct Answer
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Wexford Industrial Supply is considering a new project with estimated depreciation of $26,000, fixed costs of $79,000, and total sales of $187,000. The variable costs per unit are estimated at $11.80. What is the accounting break-even level of production?

Correct Answer
verified

Which one of the following represents the level of output where a project produces a rate of return just equal to its requirement?

Correct Answer
verified

Which one of the following types of analysis is the most complex to conduct?

Correct Answer
verified

Which one of the following statements concerning variable costs is correct?

Correct Answer
verified

An analysis which combines scenario analysis with sensitivity analysis is called _____ analysis.

Correct Answer
verified

Exam 11: Project Analysis and Evaluation

Correct AnswerverifiedShow Answer

Wexford Industrial Supply is considering a new project with estimated depreciation of $26,000, fixed costs of $79,000, and total sales of $187,000. The variable costs per unit are estimated at $11.80. What is the accounting break-even level of production?

Correct AnswerverifiedShow Answer

Which one of the following represents the level of output where a project produces a rate of return just equal to its requirement?

Correct AnswerverifiedShow Answer

Which one of the following types of analysis is the most complex to conduct?

Correct AnswerverifiedShow Answer

Which one of the following statements concerning variable costs is correct?

Correct AnswerverifiedShow Answer

An analysis which combines scenario analysis with sensitivity analysis is called _____ analysis.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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