MBA 620 FINAL PAPER 2026 QUESTIONS WITH
FULL ANSWERS
◉ For evaluating ________ _______ __________, managers must considere
both the quantitative analysis, which provides data to support
decisions, and qualitative factors, which are not easily measurable.
Answer: long-term investments
◉ Evaluates how long it will take to recover the initial investment
Answer: payback method
◉ Is the time is takes to generate enough cash receipts from an
investment to cover the cash outflows for the investment Answer:
payback period
◉ What are the two weaknesses of the payback method? Answer:
ignores the time value of money and ignores cash flows after the
payback period
◉ What are opportunity costs?
a. The net gain that is given up when choosing one option over
another.
,b. The revenues forgone when choosing one option over another.
c. The costs avoided when choosing one option over another.
d. The costs associated with one option (opportunity). Answer: a
◉ One of the products ABC company manufactures is picture frames.
Which of the following costs would be relevant when deciding
whether to a make or buy (outsource) the glass part of the frame?
a. The direct material cost of the glass.
b. The cost of equipment bought last year to cut the glass to size.
c. Depreciation on the factory building.
d. The plant manager's salary. Answer: a
◉ What do we call costs that could be eliminated with one course of
action, and are always relevant to a decision?
a. allocated fixed costs
b. sunk costs
c. avoidable costs
d. opportunity costs Answer: c
◉ What does it mean to 'capitalize and expense'?
, a. To report the whole expense of a major investment in the time
period when it was purchased.
b. To report an expense in the capital expenditures account.
c. To spread a liability balance over a period of years.
d. To record the cost as an asset, then record a depreciation expense
over a period of years that accumulates to the purchase cost to offset
that asset balance. Answer: d
◉ What is the time value of money?
a. The monetary value of a project's future net cash flows at time
zero.
b. The monetary value of accountants' time spent on a project.
c. Funds received today are worth less than the same amount
received in the future because of depreciation.
d. Funds received today are worth more than the same amount
received in the future because those funds could be invested today
and earn interest in the interim. Answer: d
◉ Involves establishing a master budget for the organization's
operating activities (for example, sales and production) Answer: the
planning phase
FULL ANSWERS
◉ For evaluating ________ _______ __________, managers must considere
both the quantitative analysis, which provides data to support
decisions, and qualitative factors, which are not easily measurable.
Answer: long-term investments
◉ Evaluates how long it will take to recover the initial investment
Answer: payback method
◉ Is the time is takes to generate enough cash receipts from an
investment to cover the cash outflows for the investment Answer:
payback period
◉ What are the two weaknesses of the payback method? Answer:
ignores the time value of money and ignores cash flows after the
payback period
◉ What are opportunity costs?
a. The net gain that is given up when choosing one option over
another.
,b. The revenues forgone when choosing one option over another.
c. The costs avoided when choosing one option over another.
d. The costs associated with one option (opportunity). Answer: a
◉ One of the products ABC company manufactures is picture frames.
Which of the following costs would be relevant when deciding
whether to a make or buy (outsource) the glass part of the frame?
a. The direct material cost of the glass.
b. The cost of equipment bought last year to cut the glass to size.
c. Depreciation on the factory building.
d. The plant manager's salary. Answer: a
◉ What do we call costs that could be eliminated with one course of
action, and are always relevant to a decision?
a. allocated fixed costs
b. sunk costs
c. avoidable costs
d. opportunity costs Answer: c
◉ What does it mean to 'capitalize and expense'?
, a. To report the whole expense of a major investment in the time
period when it was purchased.
b. To report an expense in the capital expenditures account.
c. To spread a liability balance over a period of years.
d. To record the cost as an asset, then record a depreciation expense
over a period of years that accumulates to the purchase cost to offset
that asset balance. Answer: d
◉ What is the time value of money?
a. The monetary value of a project's future net cash flows at time
zero.
b. The monetary value of accountants' time spent on a project.
c. Funds received today are worth less than the same amount
received in the future because of depreciation.
d. Funds received today are worth more than the same amount
received in the future because those funds could be invested today
and earn interest in the interim. Answer: d
◉ Involves establishing a master budget for the organization's
operating activities (for example, sales and production) Answer: the
planning phase
