Matthew Corp

question 7

Multiple Choice

Matthew Corp. has changed from a system of recording time worked on clock cards to a computerized payroll system in which employees record time in and out with magnetic cards. The computerized system automatically updates all payroll records. Because of this change,

• A)a generalized computer audit plan must be used.
• B)part of the audit trail is altered.
• C)the potential for payroll-related fraud is diminished.
• D)transactions must be processed in batches.

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Definitions:

Multiple IRR Projects

Investment projects that, due to their cash flow structure, yield more than one internal rate of return, complicating the investment decision.

Discounted Cash Flow

A valuation method used to estimate the attractiveness of an investment opportunity, by calculating the present value of expected future cash flows.

Discounted Payback

A capital budgeting method that calculates the amount of time needed to recoup an investment based on its discounted cash flows.

Profitability Index

A calculation used to assess the desirability of an investment, defined as present value of future cash flows divided by initial investment.