Which of the Following Would Not Be Considered a Benefit

question 63

Multiple Choice

Which of the following would not be considered a benefit of conducting post-implementation audits of capital investment projects?

• A) Such audits ensure the realization of future after-tax cash flows.
• B) Such audits should reduce disincentive effects associated with using one type of model for capital investment analysis (e.g., NPV) and a different model for evaluation of subsequent financial performance (e.g., ROI).
• C) Knowledge that investments are subject to post-implementation audit can counter tendencies to inflate estimates of net cash benefits associated with proposed investment projects.
• D) Such audits can help an organization achieve greater levels of goal congruence in terms of the capital budgeting process.

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Definitions:

Profit-Sharing Plans

A company program that gives employees a share in the profits of the company.

Residual Claimants

Individuals or entities entitled to a share of a company's profits after all obligations have been met.

Team Production

A production process in which employees work together under the supervision of the owner or the owner’s representative.

Contracting Out

The practice of hiring external organizations or individuals to perform services or create goods that were previously done in-house.