Which equation describes the calculation of the cash excess or deficiency section of the cash budget?
1) Collections from customers – selling and administrative expenses – borrowings = Cash excess or deficiency
2) Cash receipts + Cash disbursements = Cash excess or deficiency
3) Cash receipts + Cash available – Cash disbursements = Cash excess or deficiency
4) Beginning cash balance + Cash receipts -Cash disbursements = Cash excess or deficiency
What two categories of costs are never relevant in decisions?
1) Sunk costs and future costs that do not differ between the alternatives.
2) Unavoidable costs and differential costs.
3) Opportunity costs and sunk costs.
4) Variable and fixed costs.
Which of the following is not a sunk cost?
1) This year’s depreciation on an asset purchased three years ago.
2) The cost of a new asset that is being purchased to replace an asset purchased ten years ago.
3) The current book value on an asset purchased eight years ago.
4) The cost of an asset purchased five years ago.