Which of the following statements is correct regarding the predictability of analytical procedures in a financial statement audit?
a. Relationships involving only balance sheet accounts tend to be more predictable than relationships involving income statement accounts
b. Relationships involving income statement accounts tend to be more predictable than relationships involving only balance sheet accounts
c. Relationships involving transactions subject to management discretion tend to be more predictable than automated transactions
d. Relationships in a dynamic environment tend to be more predictable than relationships in a stable environment
Ans: b. Relationships involving income statement accounts tend to be more predictable than relationships involving only balance sheet accounts
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Which one of the following cases would most likely be filed under the theory of disparate impact?
A. Majority of the applicants with high test scores are rejected due to an affirmative action plan. B. A majority applicant is rejected on the grounds that the company only hires individuals from the minority group. C. Minority applicants are being disproportionately rejected relative to majority applicants by a paper-and-pencil test. D. A minority employee is fired for testifying in a discrimination suit filed against an employer. E. At a particular organization, employees belonging to the minority group are given more privileges and benefits compared to employees belonging to the majority group.
An investment has an outlay of 100 and after-tax cash flows of 40 annually for four years. A project enhancement increases the outlay by 15 and the annual after-tax cash flows by 5. As a result, the vertical intercept of the NPV profile of the enhanced project shifts:
A. up and the horizontal intercept shifts left. B. up and the horizontal intercept shifts right. C. down and the horizontal intercept shifts left.