BUS 278 WEEK 4 QUESTIONS 100 % CORRECT
Question 1. Question : (TCO 1) The type of budget that is updated on a regular basis is known as a _____.
Question 2. Question : (TCO 2) The quantitative forecasting method that uses actual sales from recent time periods to predict future sales, assuming each period has equal influence on the prediction of future sales, is the _____.
(TCO 3) The regression statistic that measures how many standard errors the coefficient is from zero is the _____.
Question 4. Question : (TCO 4) Capital expenditures are incurred for all of the following reasons except _____.
Question 5. Question : (TCO 5) The lowest unit within a company for which a budget is prepared is called the _____.
Question 6. Question : (TCO 6) Which of the following is a disadvantage of the payback technique?
Question 7. Question : (TCO 1) There are several approaches that may be used to develop the budget. Managers typically prefer an approach known as participative budgeting. Discuss this form of budgeting and identify its advantages and disadvantages.
Question 8. Question : (TCO 2) Budgeting and forecasting are both vital to a company- success. Compare and contrast these two elements.
Question 9. Question : (TCO 2) Use the table Television Sales Time Series to answer the questions below.
Television Sales Time Series
(in thousands)
Day Sales Day Sales
1 24.0 9 26.0
2 25.0 10 27.0
3 26.0 11 27.0
4 27.0 12 26.5
5 28.5 13 28.0
6 28.0 14 27.0
7 27.0 15 29.0
8 27.5
Part (a): What is the project sales for Day 16 using a 3-day moving average?
Part (b): What is the project sales for Day 16 using a 6-day moving average?
Part (c): Use the mean absolute deviation (MAD) and mean square error (MSE) to determine which average provides the better forecast.
Question 10. Question : (TCO 3) Use the table “Food and Beverage Sales for Luigi- Italian Restaurant†to answer the questions below.
Food and Beverage Sales for Luigi- Italian Restaurant
($000s)
Month First Year Second Year
January 218 237
February 212 215
March 209 223
April 251 174
May 256 174
June 216 135
July 131 142
August 137 145
September 99 110
October 117 117
November 137 151
December 213 208
Part (a): Calculate the regression line and forecast sales for February of Year 3.
Part (b): Calculate the seasonal forecast of sales for February of Year 3.
Part (c): Which forecast do you think is most accurate and why?
Question 11. Question : (TCO 6) Jackson Company is considering two capital investment proposals. Estimates regarding each project are provided below.
Project Nuts Project Bolts
Initial Investment $175,000 $100,000
Annual Net Income $30,000 52,000
Annual Cash Inflow $70,000 $45,000
Salvage Value $0 $0
Estimated Useful Life 3 years 3 years
The company requires a 9% 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 Jackson Company accept and why?
Question 12. Question : (TCO 6) Top Growth Farms, a farming cooperative, is considering purchasing a tractor for $468,000. The machine has a 10-year life and an estimated salvage value of $32,000. Top Growth uses straight-line depreciation. Top Growth estimates that the annual cash flow will be $78,000. The required rate of return is 9%.
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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