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Anderson FINAL exam
this is for SDSU Dr. Andersons acctg202 final exam/exam 6
28
Accounting
Undergraduate 2
05/08/2011

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Term
what does IRR stand for
Definition
Internal Rate or Return
Term
What is another name for Internal Rate of Return?
Definition
IRR
Term
What is the formula for IRR?
Definition
Today's Cost/ Yearly Expense
Term
What does NPV stand for?
Definition
Net Present value
Term
What does a positive NPV signify?
Definition
The fact that the deal is a money maker
Term
What does a negative NPV signify?
Definition
That the deal is a money looser
Term
What can be learned if the IRR is less than the Cost of Capital?
Definition
That the deal is a money looser
Term
What is the formula for NPV?
Definition
(PV of future money)-(Today's Cost)
Term
T/F-The IRR is given as a percentage?
Definition
True
Term
What is the formula to find BookValue?
Definition
BBookvalue=originalcost-all depreciation
Term
what is the Net Cash Flow formula?
Definition
(sell price-Book Value)= Gain/loss*Tax%
Term
Which is easier to calculate? NPV or IRR?
Definition
NPV beause it will always give a definitive number
Term
What is an additional benefit of NPV?
Definition
It is easier to adjust for risk
Term
The higher the risk...the higher the ...??
Definition
Hurdle Rate
Term
The hurdle rate that is used in a net-present value analysis is the same as the firm's:
1) Discount Rate
2) IRR
3) Minimum desired rate of return
4) objective rate of return
5) discount rate and minimum desired rate of return
Definition
5) discount rate and minimum desired rate of return
Term
The net present value of a project is $13,458 at a cost of capital of 23%. The Internal Rate of Return would then be:
1) 12%
2) Greater than 12%
3) Less than 12%
4) Cannot be determined
Definition
2) Greater than 12%
Term
what is the formula for markup %?
Definition
((profit+Other costs)/Cost base)*100=markup %
Term
what is the formula for total charge labor rate?
Definition
hourly labor rate+(total OH/Total labor hours)+Profit per hour=
Term
What is competitive bidding?
Definition
Where two or more companies submit bids
Term
computer integrated manufacturing
Definition
A computer design and costing
Term
cost plus pricing
Definition
a pricing approach in which the price is equal to cost plus a markup
Term
penetration pricing
Definition
setting a low initial price for a new product in order to penetrate the market deeply and gain a large and broad market share
Term
perfect competition
Definition
a market in which the price does not depend on the quality sold by any one producer
Term
predatory pricing
Definition
An illegal practice in which the price of a product is temporarily to broaden demand. Then the product's supply is restricted and the price is raised
Term
price discrimination
Definition
the illegal practice of quoting different prices for the same product or service to different buyers, when the price differences are no justified by cost differences
Term
Price takers
Definition
Firms whose products or service are determined totally by the market. The price you can charge is fixed by the market; especially for commodities (oil, milk, etc.)
Term
Which of the following terms describes a pricing strategy in which a new product's initial pricing is set relatively low in order to gain a large market share?
1) Penetration pricing
2) Price Skimming
3) Customer Pricing
4) Designed Pricing
5) Market-Share Pricing
Definition
1) Penetration Pricing
Term
what costs are used in the Variable Method?
Definition
Direct Materials, Direct Labor, Variable OH
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