Question 1: For performance evaluation purposes, the variable costs of a service department should be charged to operating departments using:
1- the actual variable rate and the budgeted level of activity for the period.
2- the budgeted variable rate and the actual level of activity for the period.
3- the budgeted variable rate and the budgeted level of activity for the period.
4- the actual variable rate and the peak-period or long-run average servicing capacity.
Question 2: Suture Corporation's discount rate is 12%. If Suture has a 5-year investment project that has a project profitability index of zero, this means that:
1 the net present value of the project is equal to zero.
2 the internal rate of return of the project is equal to the discount rate.
3 the payback period of the project is equal to the project's useful life.
4 both 1 and 2 above are true.
Question 3: If the net present value of a project is zero based on a discount rate of 16%, then the internal rate of return is:
1 equal to 16%.
2 less than 16%.
3 greater than 16%.
4 cannot be determined from this data.