Question1: In a sell or process further decision, an avoidable fixed production cost incurred after the split-off point is relevant to the decision.
[A] False
[B] True
Question2: When discounting cash flow methods of capital budgeting are used, the working capital required for a project is ordinarily counted as a cash outflow at the beginning of the project and as a cash inflow at the end of the project.
[A] False
[B] True
Question3: The salvage value of new equipment should not be considered when using the internal rate of return method to evaluate a project.
[A] False
[B] True
Question4: When a company has a production constraint, the product with the highest contribution margin per unit of the constrained resource should be given the highest priority.
[A] False
[B] True
Question5: In the payback method, depreciation is added back to net operating income when calculating the net annual cash flows.
[A] False
[B] True