Online Access Free BEC Practice Test

The internal rate of return for a project can be determined:

• A.Only if the project's profitability index is greater than one.
• B.By subtracting the firm's cost of capital from the project's profitability index.
• C.Only if the project cash flows are constant.
• D.By finding the discount rate that yields a net present value of zero for the project.

A change in credit policy has caused an increase in sales, an increase in discounts taken, a reduction in
the investment in accounts receivable, and a reduction in the number of doubtful accounts. Based upon
this information, we know that:

• A.The average collection period has decreased.
• B.Gross profit has declined.
• C.The size of the discount offered has decreased.
• D.Net profit has increased.

Which of the following activities is considered a support activity?

• A.Procurement of materials.
• B.Product advertising.
• C.Delivery of products.
• D.In-home warranty service.

Suppose the equilibrium wage for low skilled workers in California is $6.00 an hour. If the government
increases the minimum wage to $7.00 an hour, what would be the effect on the market for low skilled
labor?

• A.The supply of labor would increase.
• B.An excess supply of labor would result.
• C.An excess demand for labor would result.
• D.The demand for labor would decrease.

Harvey Co. is evaluating a capital investment proposal for a new machine. The investment proposal
shows the following information:

If acquired, the machine will be depreciated using the straight-line method. The payback period for this
investment is:

• A.2 years.
• B.2.67 years.
• C.3.25 years.
• D.2.5 years.