You own a restaurant and just negotiated a decrease in the cost of steaks by 25 cents a steak. You
normally sell 300,000 steak dinners a year. Your business pays an average of 30 percent in
income taxes.
What is the annual benefit of this increased efficiency?
A) $52,500 B) $75,000 C) $22,500 D) $210,000
A
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Which of the following is not a stage of cluster sampling?
A) one-stage sampling B) two-stage sampling C) zero-stage sampling D) multi-stage sampling
A bakery company is considering one capital budgeting project involving the replacement of a
sophisticated brick oven, and another capital budgeting project involving research and development into synthetic food substitutes. Which of the following statements is MOST correct concerning the risk-adjusted discount rate(s) for the projects? A) The rate will likely be higher for the replacement project because the likelihood of success is higher. B) The rate should be higher for the replacement project because the company is more certain of the returns from a project similar to their existing business. C) The rate will likely be higher for the research and development project because of the uncertainty involved with research and development projects. D) The rate should be the same for both projects because they are being considered by one company with the same common shareholders.