Hey guys I am here again, ASAP thanks
You sell a product at $20 per unit with variable costs of $5 per unit
and total fixed costs of $30,000. The after-tax profit is $120,000 and
the tax rate is 40%. How many units must be sold to earn the after-tax
profit?
	  A. 15,333 

	  B. 8,000 

	  C. 1,000 

	  D. 2,500 


2.Cost-volume-profit analysis assumes that over the relevant range
	  A. Variable costs are nonlinear 

	  B. Fixed costs are nonlinear 

	  C. Selling prices are unchanged 

	  D. Total costs are unchanged 


3.An initial investment of $20,000 generates annual cash inflows of
$8,000. The payback period is:
	  A. 2.5 

	  B. 2 

	  C. .4 

	  D. 3 


4.The rate of return earned on a proposal such that the present value
of cash inflows equals the present value of cash outflows is derived
from the internal rate of return method.
	 True 
	 False 
5.The rate of return earned on a proposal such that the present value
of cash inflows equals the present value of cash outflows is derived
from the internal rate of return method.
	 True 
	 False 


6.Capital budgeting techniques are least likely to be used in evaluating the
	  A. Acquisition of new aircraft by a cargo company 

	  B. Design and implementation of a major advertising program 

	  C. Adoption of a new method of allocating nontraceable costs to product lines 
	  D. Sale by a conglomerate of an unprofitable division 

7.Which of the following factors should not be considered when
deciding whether to investigate a variance?
	  A. Magnitude of the variance and the cost of investigation 

	  B. Trend of the variances over time 

	  C. Likelihood that an investigation will eliminate future
occurrences of the variance
	  D. Whether the variance is favorable or unfavorable 

8.The return on investment typically comes from two sources:
__________ and capital gains (losses).
	  A. liquidity 

	  B. selling price 

	  C. purchase price 

	  D. current income 


9.Applications and uses of financial models include:
	  A. Risk analysis 

	  B. Cash budgeting 

	  C. New product analysis 

	  D. All of the above

1.  $120,000/(1 -0.4) = $200,000.  $15 profit per unit.  This means
2000 units must be sold to cover the fix costs, and an additional
13,333 units must be sold to earn the after-tax profit.  Therefore,
the total number of units is A. 15,333.

2. C. Selling prices are unchanged.  "Chapter 3"
http://titan.iwu.edu/~jfriedma/CostClasses/Hch03.ppt

3.  $20,000/$8,000 = 2 .5 so the answer is A.

4.  True.  5.  Appears to be the same question.

6. B. Advertising is expensed, not capitalized.

7. D.  An unexpected variance should always be considered for
investigation, regardless of whether it is favorable or unfavorable.

8. D.  Current income, which would typically be a dividend.

9. D.  All of the above.

Sincerely,

Wonko