Which of the following does not represent an advantage of the unadjusted rate of return over the payback method for evaluating capital projects?

Which of the following does not represent an advantage of the unadjusted rate of return over the payback method for evaluating capital projects?
Multiple Choice
The unadjusted rate of return method considers the investment's profitability.
The unadjusted rate of return method considers the time value of money.Correct
The unadjusted rate of return is a percentage that can be compared to a stated hurdle rate.
None of these answers is correct.
Answer
The unadjusted rate of return method considers the time value of money.Correct
Explanation
The payback method and the unadjusted rate of return method both ignore the time value of money.

Herald Company paid $2,800 cash for production supplies. The recognition of this event will:

Multiple Choice

None of these answers are correct.


not impact total assets.

Correct

decrease equity.


increase expenses.

Answer
not impact total assets. Correct

Explanation
The purchase of production supplies for cash decreases the asset account Cash and increases the asset account Production Supplies. There is no effect on total assets, total equity, or net income.

Which of the following items is qualitative?

Multiple Choice
Degree to which the new machine can be integrated with existing machineryCorrect
Depreciation of existing machine
Book value of the existing machine
Cost of new machine

Answer
Degree to which the new machine can be integrated with existing machineryCorrect