QUESTION: 69

DRAG DROP (Drag and Drop is not supported)

Place each method of analysing risk and uncertainty against the statement that describes it correctly.

See Explanation section for answer.

Answer(s): A

Explanation:

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QUESTION: 70

Which of the following statements is TRUE about the activity based costing system when compared to absorption costing method?

ABC is easier to administer than an absorption costing system
ABC will be less detailed than an absorption costing system
ABC will provide more accurate overhead allocation than absorption costing
ABC will cost less to administer than an absorption costing system

Answer(s): C

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A company is comprised of two divisions, each of which manufactures a single product. Division A manufactures a product which can be sold in a perfect external market or transferred as an intermediate product to division B. Division B finishes the intermediate product and sells this in a perfect external market.

Due to company policy, internal transfers are recorded at the external market price. At this transfer price both divisions make a profit from their activities.

Which of the following will NOT be achieved by the company's transfer pricing policy?

Divisional autonomy
A fair basis for divisional performance evaluation
Motivation of divisional managers to produce and sell as much as possible
Goal congruence

Answer(s): A

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QUESTION: 72

You have just assessed an investment proposal, involving an immediate cash outflow followed by a series of cash inflows over the next 7years, by deducing the NPV and the IRR. You have now discovered that you have

underestimated the discount rate.

Correcting the underestimation will have the following effect, relative to your original deductions:

NPV will reduce, IRR will not change
NPV and IRR will not change
NPV will increase, IRR will reduce
NPV and IRR will both increase
Not enough information given for an answer

Answer(s): A

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Free P2 Exam Braindumps (page: 18)

QUESTION: 69

Explanation:

QUESTION: 70

QUESTION: 71

QUESTION: 72