AICPA Exam CPA-Business Topic 3 Question 80 Discussion

Actual exam question for AICPA's CPA-Business exam

Question #: 80
Topic #: 3

[All CPA-Business Questions]

All of the following are the rates used in net present value analysis, except for the:

ACost of capital.

BHurdle rate.

CDiscount rate.

DAccounting rate of return.

Show Suggested Answer

Suggested Answer: C

Choice 'c' is correct. The most logical sequence in planning and controlling capital expenditures is to begin with identifying capital addition projects and other capital needs.

Choice 'a' is incorrect. Analyzing capital addition proposals omits other capital needs.

Choice 'b' is incorrect. Analyzing and evaluating all promising alternatives is beyond the scope of planning and controlling capital expenditures.

Choice 'd' is incorrect. Developing capital budgets is the same as planning and controlling capital expenditures.

by Jovita at Jan 22, 2024, 03:00 PM

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Leonora

2 days ago

I agree with Glory, because the other options are all related to rates used in net present value analysis.

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Glory

2 days ago

I think the answer is D) Accounting rate of return.

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