Assigment PPC

1. Forecasts are most useful if they are based on

A. Quantitative factors.
B. Qualitative factors.
C. Both quantitative and qualitative factors.
D. Neither qualitative nor quantitative factors.

2. Which of the following statements is TRUE about the integration of planning systems
and the level of forecast accuracy ?
A. They are independent.
B. The planning system should include information on the level of forecast accuracy.
C. Forecast accuracy is implied in the planning process system.
D. Once the data are input into the planning system they do not change.

3. Which of the following is MOST directly affected by forecast inaccuracy ?

A. Capacity.
B. Quality.
C. Budget.
D. Planning.

4. Which of the following is a qualitative method of forecasting ?

A. Expert opinion. B. Historical data.
C. Exponential smoothing. D. Moving average.

5. Seasonality is demand that shows which of the following patterns ?

A. Repetitive pattern over some time interval.
B. General movement up or down over time.
C. Repetitive pattern based on economic conditions.
D. Repetitive pattern based on promotional activity.

6. Which of the following depend on external conditions affecting on demand ?

A. Sales promotions. B. Product life cycle.
C. Economic cycle. D. Product price policy.

7. Given the following information, calculate the new forecast for Product A using
exponential smoothing.
. Alpha factor - 0.7
. Actual Demand - 600.
. Old Forecast - 562.
. Seasonal Index - 2.1
A. 813.
B. 882.
C. 1260.
D. 589.

8. Which of the following is the BEST statement about the general principles of
forecasting ?
A. Forecasting are more accurate for individual items than for groups of items.
B. Forecasting are more accurate for distant periods of time.
C. Every forecast should include an estimate of error.
D. Forecasts are usually accurate.

9. Why is important to track the forecast ?

A. To compare the actual sales with the forecast.
B. To improve our forecasting methods.
C. To utilize actual sales data.
D. To satisfy marketing's need to know.

10. Which of the following statement is MOST accurate ?

A. If we wish to forecast demand, past sales must be used for the forecast.
B. Forecasts made in dollars for total sales should be used by manufacturing.
C. Forecasts should be made for individual items in a group.
D. The circumstances relating to demand data should be recorded.

11. Depreciation is a process of:

A. valuation B. cost allocation

C. pricing D. Justification.

12. ABC Company provides the following information:

 Cost of the equipment: Rs. 5,000

 Salvage value: Rs. 500
 Useful life of equipment: 10 years
A. Rs. 500
B. Rs. 550
C. Rs. 50
D. Rs. 450
13. Consider the following information:

 Cost of equipment: Rs. 150,000

 Salvage vale of equipment: Rs. 10,000

 No of hours the equipment has been used during the current period: 2,000 hours

 Estimated life time hours the equipment will be used: 20,000 hours

 Estimated useful life of the equipment in years: 15 years

Based on the above information, the depreciation on equipment for current period under activity
method is:Consider the following information:

 Cost of equipment: $150,000

 Salvage vale of equipment: $10,000

  No of hours the equipment has been used during the current period: 2,000 hours

 Estimated life time hours the equipment will be used: 20,000 hours

 Estimated useful life of the equipment in years: 15 years

Based on the above information, the depreciation on equipment for current period under activity
method is:

A. Rs. 15,000

B. Rs. 14,000

C. Rs. 9333.33

D. Rs. 10,000

14. The current worth of a sum of money to be received at a future date is called:

A. real value

B. future value

C. present value

D. salvage value

15. The difference between the present value of cash inflows and the present value of cash
outflows associated with a project is known as:

A. net present value of the project

B. net future value of the project

C. net historical value of the project

D. net salvage value of the project

16. Generally, a project is considered acceptable if its net present value is:

A. negative or zero

B. negative or positive

C. positive or zero

D. negative
17. A company is considering the following three investment proposals:

A). Investment required: Rs. 80,000, present value of future cash inflows: Rs. 96,000

B). Investment required: Rs. 75,000, present value of future cash inflows: Rs. 120,000

C). Investment required: Rs. 100,000, present value of future cash inflows: Rs. 150,000

How would you rank the above investment proposals using profitability index method?

i) B, A, C

ii) C, A, B

iii) A, B, C

iv) B, C, A

18. Consider the following data on a proposed investment:

 Investment required: Rs. 160,000

 Annual cash inflows: Rs. 40,000

 Life of the investment: 6 years

 Salvage value: 0

 Discount rate: 10%

Based on the above data, what is the payback period of the proposed investment project?

A. 0.25 years

B. 3 years

C. 4 years

D. 5 years

19. The amount by which an item contributes towards covering fixed cost and providing for
profit is known as:

A. gross profit
 B. gross margin

C. contribution margin

D. net margin

20. Consider the following information:

 Sales revenue: Rs. 12,000

 Variable manufacturing expenses: Rs. 3,000

 Variable marketing and admin. expenses: Rs. 1,000

 Fixed manufacturing expenses: Rs. 1,500

 Fixed marketing and admin. expenses: Rs. 500

Based on the above information, the contribution margin is:

A. Rs. 9,000

B. Rs. 8,000

C. Rs. 10,500

D. Rs. 10,000

_______________&____&________&________&____________________