Question 1

Firefighters risk serious and potentially fatal accidents whenever they attend an incident.
Which of the following statements is correct?

Options :

A : The risk of serious accidents should be accepted in all but the most extreme incidents.

B : The risk of serious accidents should always be accepted because that is what firefighters are paid to do.

C : The risk of serious accidents should be avoided because the risk has a high probability and a high impact.

D : Every incident should be the subject of a detailed and thorough risk assessment before the firefighters are permitted to respond.

Answer: A

Question 2

When considering a capital investment, relevant costs for decision making have which THREE of the following features?

Options :

A : They are future costs.

B : They are committed costs.

C : They are incremental costs.

D : They are unavoidable costs.

E : They are cash flows.

Answer: A,C

Question 3

Which of the following statements are correct with regard to responsibility centres?
Select ALL that apply.

Options :

A : Revenue centre managers have a lower level of decision-making authority than profit centre managers.

B : Revenue centre managers and profit centre managers are accountable for controllable costs only.

C : Profit centre managers and investment centre managers are responsible for the majority of operating costs incurred.

D : Investment centre managers have a higher level of managerial authority than profit centre managers.

E : Managers of profit centres have authority over the level of investment in working capital but managers of cost centres do not.

Answer: A,C,D

Question 4

A company is classifying its quality costs to prepare a quality cost report. Which of the following are conformance costs?
Select ALL that apply.

Options :

A : Internal Failure Costs

B : External Failure Costs

C : Prevention Costs

D : Appraisal Costs

Answer: C,D

Question 5

You have just assessed an investment proposal, involving an immediate cash outflow followed by a series of cash inflows over the next 7years, by deducing the NPV and the IRR. You have now discovered that you have
underestimated the discount rate.
Correcting the underestimation will have the following effect, relative to your original deductions:

Options :

A : NPV will reduce, IRR will not change

B : NPV and IRR will not change

C : NPV will increase, IRR will reduce

D : NPV and IRR will both increase

E : Not enough information given for an answer

Answer: A

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