GB 519 RANK Career Path Begins/gb519rank.com GB 519 RANK Career Path Begins/gb519rank.com | Page 42

Special machinery for the part that has no resale value.
Current direct material costs for the part.
UNIT 4 QUIZ
Question 7. Question : Which one of the following is an
advantage of the book
(accounting) rate of return method for analyzing capital
investment proposals?
Student Answer:
It is not affected by different accounting methods.
It is precise and objective.
Data for calculating the return are typically readily available.
The method explicitly adjusts for the time value of money.
The accounting rate of return is generally approximately equal
to a project's internal rate of return (IRR).
Question 8. Question : Which one of the following statements
concerning capital
budgeting is not true?
Student Answer:
A basic objective underlying capital budgeting is to select
assets that will earn a satisfactory return.