Management Accounting - Study Mode
[#191] Type of outcomes that can be measured in numerical terms are classified as
Correct Answer
(B) quantitative factors
Explanation
Solution: Type of outcomes that can be measured in numerical terms are classified as quantitative factors. Quantitative factors are outcomes from certain actions that are measurable in numbers or numeric terms. In other words, managers can quantify the effects of a decision. This could include measuring costs, revenues, or even non-financial data for outcomes to a decision.
[#192] Low level managers in organizations are to make decisions about
Correct Answer
(B) operating income maximization
Explanation
Solution: Low level managers in organizations are to make decisions about operating income maximization. Income smoothing is the shifting of revenue and expenses among different reporting periods in order to present the false impression that a business has steady earnings. Management typically engages in income smoothing to increase earnings in periods that would otherwise have unusually low earnings.
[#193] Cash flows method, used by net present value method and internal rate of return are
Correct Answer
(B) discounted cash flows
Explanation
Solution: Cash flows method, used by net present value method and internal rate of return are discounted cash flows. Discounted cash flow (DCF) is a valuation method used to estimate the value of an investment based on its future cash flows.
[#194] Working capital cash outflow, cash outflow to buy machine and cash inflow from machine are examples of
Correct Answer
(C) net initial investment
Explanation
Solution: Working capital cash outflow, cash outflow to buy machine and cash inflow from machine are examples of net initial investment. Net investment is the amount spent by a company or an economy on capital assets, or gross investment, less depreciation. Net investment helps give a sense of how much money a company is spending on capital items used for operations, such as property, plants, equipment, and software.
[#195] Decrease in purchasing power of any monetary unit such as euro, dollars etc. is classified as
Correct Answer
(B) inflation
Explanation
Solution: Decrease in purchasing power of any monetary unit such as euro, dollars etc. is classified as inflation. Price Inflation is when prices get higher or it takes more money to buy the same item and this is what people commonly think of when they hear the word inflation.