BUS 278 WEEK 4 MID TERM EXAM 100% CORRECT QUESTIONS
Question 1 TCO 1 Why are budgets useful in the planning process
Question 2. Question : (TCO 2) The quantitative forecasting method that uses actual sales from recent time periods to predict future sales assuming that the closest time period is a more accurate predictor of future sales is the _____.
Question 3. Question : (TCO 3) Before performing linear regression, it is important to ensure that a linear relationship exists between the dependent and independent variables by plotting observed data on a diagram called the _____.
Question 4. Question : (TCO 4) Marketing costs include _____.
Question 5. Question : (TCO 5) Priority budgeting that ranks activities is known as _____.
Question 6. Question : (TCO 6) Which of the following ignores the time value of money?
Question 7. Question : (TCO 1) Budgeting is a planning and control system. Discuss how budgeting contributes to these two functions of management.
Question 8. Question : (TCO 2) There are a variety of forecasting techniques that a company may use. Identify and discuss the three main quantitative approaches used for time series forecasting models.
Question 9. Question : (TCO 2) The Federal Election Commission maintains data showing the voting age population, the number of registered voters, and the turnout for federal elections. The following table shows the national voter turnout as a percentage of the voting age population from 1972 to 1996 (The Wall Street Journal Almanac, 1998).
Voter Turnout
Year % Turnout Year % Turnout
1972 55 1986 36
1974 38 1988 50
1976 54 1990 37
1978 37 1992 55
1980 53 1994 39
1982 40 1996 49
1984 53
Part (a): Use exponential smoothing to forecast this time series. Consider smoothing constants of a = 0.1 and 0.2. What is the forecast of the percentage of turnout in 1998?
Part (b): Use the mean absolute deviation (MAD) to determine which smoothing constant provides the best forecast of voter turnout.
Question 10. Question : (TCO 3) Use the table “Food and Beverage Sales for Jimmy- Greek Restaurant†to answer the questions below.
Food and Beverage Sales for Jimmy- Greek Restaurant
($000s)
Month First Year Second Year
January 242 263
February 235 238
March 232 247
April 278 193
May 284 193
June 240 149
July 145 157
August 152 161
September 110 122
October 130 130
November 152 167
December 236 231
Part (a): Calculate the regression line and forecast sales for January of Year 3.
Part (b): Calculate the seasonal forecast of sales for January of Year 3.
Part (c): Which forecast do you think is most accurate and why?
Question 11. Question : (TCO 6) Carr Company is considering two capital investment proposals. Estimates regarding each project are provided below.
Project Soup Project Nuts
Initial Investment $600,000 $900,000
Annual Net Income $30,000 $63,000
Annual Cash Inflow $150,000 $213,000
Salvage Value $0 $0
Estimated Useful Life 5 years 6 years
The company requires a 10% rate of return on all new investments.
Part (a): Calculate the payback period for each project.
Part (b): Calculate the net present value for each project.
Part (c): Which project should Carr Company accept and why?
Question 12. Question : (TCO 6) Mimi Company is considering a capital investment of $250,000 in new equipment. The equipment is expected to have a 5-year useful life with no salvage value. Depreciation is computed by the straight-line method. During the life of the investment, annual net income and cash inflows are expected to be $25,000 and $75,000, respectively. Mimi's minimum required rate of return is 10%.
Part (a): Calculate the payback period.
Part (b): Calculate the net present value.
Part (c): Calculate the accounting rate of return.
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