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NEW QUESTION: 1
Production managers for a manufacturing company are authorized to prepare emergency purchase orders for raw materials. These manually prepared orders do not go through the purchasing department and do not require a receiving report. The managers forward the invoice and purchase order to the accounting department for payment. Which of the following internal controls would efficiently prevent abuse of this system?
A. Review the level of safety stock.
B. Forbid the use of emergency purchase orders.
C. Require a manual receiving report from the warehouse prior to payment.
D. Institute a company policy requiring rotation of orders among several suppliers.
Answer: C
NEW QUESTION: 2
Which of the following projects would likely result in multiple Internal Rates of Return?
Project A
Initial investment outlay: ($450,000)
t1: $400,000
t2: ($40,000)
t3: $190,000
Project B
Initial investment outlay: ($50,000)
t1: $0.00
t2: $0.00
t3: $75,000
Project C
Initial investment outlay: ($300,000)
t1: $15,000
t2: ($34,000)
t3: $0.00
t4: $400,000
Project D
Initial investment outlay: ($100,000)
t1: $150,000
t2: $380,000
t3: $45,000
t4: $45,000
Project E
Initial investment outlay: ($1,000,000)
t1: $1,500,000
t2: $1,300
t3: $0.00
t4: $60,000
A. The answer cannot be determined from the information provided
B. Project B, Project D
C. None of these choices
D. Project A, Project C,
E. Project C, Project E
F. Project D, Project E
Answer: D
Explanation:
Explanation/Reference:
Explanation:
In evaluating projects with "non-normal cash flows" the Internal Rate of Return method will often produce multiple IRRs which leads to an incorrect accept/reject decision. Non-normal cash flows are defined as cash flows in which the sign changes more than once. Projects A, and C involve cash outflows superimposed within their cash inflows, resulting in a sign change from positive to negative and negative to positive. In examining projects such as these, it is advisable to use either the NPV or MIRR methods, which are not subject to the problem of multiple IRRs. From observation alone, we can determine that project A and C are non-normal projects, and are thus likely to result in multiple IRR calculations. While project B, D, and E have periods of zero cash flow, they have only one change of sign in the overall cash flow process, and therefore should be characterized as "normal." While the cost of capital has been provided, it is not necessary for the determination of the correct answer in this case. What you should look for are projects with non-normal cash flows, and this should not involve any computational analysis.
Besides, the cost of capital is not incorporated into the Internal Rate of Return calculation, rather is a component of the NPV and MIRR.
NEW QUESTION: 3
You must activate an accounting trace for collecting standard accounting data in the SMF file using the criteria shown below: CPU, elapse, suspension time on an application, and package level plans starting with AB and LM user IDs starting with ADM plans starting with ABX should be excluded Which command will activate only the required traces?
A. -START TRACE (ACCTG) CLASS(1,2,3,7,8) DEST(SMF) PLAN (AB*,LM*) USERID(ADM*) EXCLUDE(PLAN(ABX*) )
B. -START TRACE (ACCTG) CLASS(1,2,3,4,7) DEST(SMF) PLAN (AB*,LM*) USERID(ADM*, AB*) XPLAN(ABX*)
C. -START TRACE (ACCTG) CLASS(1,2,3,7,8) DEST(SMF) PLAN (AB*,LM*) USERID(ADM*) XPLAN(ABX*)
D. -START TRACE (ACCTG, STATISTICS) CLASS(*) DEST(SMF) PLAN (AB*,LM*) USERID(ADM) XPLAN(ABX*)
Answer: C
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