Sometimes Employees Will Deliberately Overstate the Amount of Materials And/or

question 73

Multiple Choice

Sometimes employees will deliberately overstate the amount of materials and/or labor that should be required to complete a job.The difference between inflated and realistic standards is known as:

• A) Budget slack.
• B) Making the numbers.
• C) Lowballing.
• D) Cooking the books.

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Definitions:

Straight-Line Depreciation

A method of allocating the cost of a tangible asset over its useful life in equal annual amounts.

Net Present Value

The difference between the present value of cash inflows and the present value of cash outflows over a period of time, used in capital budgeting to assess the profitability of an investment.

Initial Cost

The upfront expenditure involved in the purchase of an asset or the start of a project.

Capital Budgeting

The process by which a business evaluates and plans for significant investments in projects or assets.