ACC 341 WORKSHOP 6.3 REVIEW QUESTIONS
Download Chapter 12 Questions 3, 5, 7, 9, 11, 15 3. Are variable costs always relevant costs? Explain. 5. “ Variable costs and differential costs mean the same thing.” Do you agree? Explain. 7. Prentice Company is considering dropping one of its product lines. What costs of the product line would be relevant to this decision? What costs would be irrelevant? 9. What is the danger in allocating common fixed costs among products or other segments of an organization? 11. Give at least four examples of possible constraints. 15. What guideline should be used in determining whether a joint product should be sold at the splitoff point or processed further? Chapter 13 Questions 7, 9, 11, 13 7. Identify two simplifying assumptions associated with discounted cash flow methods of making capital budgeting decisions. 9. What is meant by an investment project’s internal rate of return? How is the internal rate of return computed? 11. As the discount rate increases, the present value of a given future cash flow also increases. Do you agree? Explain. 13. How is the project profitability index computed, and what does it measure?