It Is Important to Get Investment Decisions Right for Which

question 56

Multiple Choice

It is important to get investment decisions right for which of the following reasons?

• A)Large amounts of resources are often involved.
• B)They may affect the business for many years.
• C)They can be difficult and/or expensive to 'bail-out' of once started.
• D)All of the above.

Recognize how direct labor hours and machine hours are used as allocation bases in different overhead costing methods.

Understand how departmental overhead rates are determined and used in cost allocation.

Understand the uncertainty and future projection aspects of financial statements.

Grasp the importance and limitations of financial statements in assessing a company's health and future prospects.

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Definitions:

Mental Age

A measure of intelligence test performance devised by Binet; the level of performance typically associated with children of a certain chronological age. Thus, a child who does as well as an average 8-year-old is said to have a mental age of 8.

Binet and Simon

Alfred Binet and Theodore Simon, psychologists who developed the first practical intelligence test, the Binet-Simon scale, to assess cognitive abilities in children.

Aptitude Test

A test designed to predict a person’s future performance; aptitude is the capacity to learn.

Automobile Mechanic

A professional who specializes in repairing, maintaining, and sometimes modifying vehicles.