Online Access Free P2 Exam Questions

Company TTM has the opportunity to invest $60,000 in a project. The project is anticipated to produce annual returns of $12,500 each year for 8 years. The cost of capital is 12%.
What is the net present value of the project? Give your answer to the nearest whole number.

Product WB currently sells for $13 per unit. Annual demand at that price is 20,000 units. If the price increases to $15, the annual demand falls by 500 units.
What is the formula for the demand curve?

• A.Qd = a - b(P
• B.Q = a - bP
• C.P = f(Q).
• D.P = a -b(Q)

When considering a capital investment, relevant costs for decision making have which THREE of the following features?

• A.They are unavoidable costs.
• B.They are incremental costs.
• C.They are cash flows.
• D.They are future costs.
• E.They are committed costs.

A risk averse decision maker will:

• A.always select the course of action that has the lowest risk.
• B.accept a risk if the expected value of the potential outcomes is positive.
• C.accept a risk if it is accompanied by a satisfactory potential return.
• D.avoid all risks.

The manager of Ice Sculpting Co. believes that too much material is being wasted during downtime. She researched, and found throughput accounting to be an adequate alternative. However, she wasn't sure if all that she read was accurate.
Which of the following statements are TRUE when using Throughput Accounting? Select ALL that apply.

• A.Not all sales equal to profit
• B.All costs, except materials, are considered fixed.
• C.If there is no demand, then there should be no production.
• D.Stocking up on inventory is bad for business.
• E.Departments should be operating at full capacity regardless of bottlenecks