1|Page
MBA 620 FINAL EXAM 2025/2026 ACTUAL EXAM
QUESTIONS AND COORRECT DETAILED ANSWERS
(VERIFIED ANSWERS) ALL ANSWERED {80 Q & A}
ALREADY GRADED A+/ MBA 620 FINAL EXAM STUDY
GUIDE | BRAND NEW!
Which performance metric would be most appropriate to
evaluate the performance of an investment center manager
when the potential for managerial conflicts of interest is high?
a. Internal rate of return (IRR)
b. Residual income (RI)
c. Return on investment (ROI)
d. Net present value (NPV) - ✔✔✔ Correct Answer > b
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.
,2|Page
d. The costs associated with one option (opportunity). - ✔✔✔ Correct
Answer > a
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. - ✔✔✔ Correct Answer > d
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. - ✔✔✔ Correct Answer > a
, 3|Page
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 - ✔✔✔ Correct 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. - ✔✔✔ Correct Answer > d
What is the general economic rule to set transfer prices?
MBA 620 FINAL EXAM 2025/2026 ACTUAL EXAM
QUESTIONS AND COORRECT DETAILED ANSWERS
(VERIFIED ANSWERS) ALL ANSWERED {80 Q & A}
ALREADY GRADED A+/ MBA 620 FINAL EXAM STUDY
GUIDE | BRAND NEW!
Which performance metric would be most appropriate to
evaluate the performance of an investment center manager
when the potential for managerial conflicts of interest is high?
a. Internal rate of return (IRR)
b. Residual income (RI)
c. Return on investment (ROI)
d. Net present value (NPV) - ✔✔✔ Correct Answer > b
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.
,2|Page
d. The costs associated with one option (opportunity). - ✔✔✔ Correct
Answer > a
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. - ✔✔✔ Correct Answer > d
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. - ✔✔✔ Correct Answer > a
, 3|Page
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 - ✔✔✔ Correct 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. - ✔✔✔ Correct Answer > d
What is the general economic rule to set transfer prices?
