Posted: July 17th, 2016

An important reason for imposing a minimum cash balance in the cash budget is?

8. The kind of standard that is most useful for planning and control is:
A. an attainable standard.
B. an ideal, or engineered, standard.
C. a negotiated standard.
D. a past experience standard.

9. Which of the following is typically not important when calculating the net present value of a project?
A. Timing of cash flows from the project.
B. Income tax effect of cash flows from the project.
C. Method of financing the project.
D. Amount of cash flows from the project.

10. The key difference between a controllable cost and a noncontrollable cost is:
A. the large amount of the cost.
B. the frequency of cost incurrence.
C. the short term ability to influence the cost by the manager.
D. whether the cost is fixed or variable.

11. An important reason for imposing a minimum cash balance in the cash budget is:
A. it provides a cushion that can absorb forecast errors.
B. it provides extra funds for managers to spend.
C. it makes the balance sheet look better.
D. all of the above.

12. In order to calculate the net present value of a proposed investment, it is necessary to know:
A. the cash flows expected from the investment.
B. the net income expected from the investment.
C. the interest rate paid on funds borrowed to make the investment.
D. the cash dividends paid on the stock each year.