# BEC REVIEW 3

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1. ----------------------- controls prevent unauthorized users from physically using the computer equipment.
Physical access controls prevent unauthorized users from physically using the computer equipment.
2. What are Physical access controls?
Physical access controls prevent unauthorized users from physically using the computer equipment.
3. What are some examples of physical access controls?
• locks on doors,
• security guards,
• alarms, and

monitoring systems
4. -------------------- controls,  protect systems from infiltration electronically.
Logical access controls,  protect systems from infiltration electronically.
5. What do Logical access controls do?
Logical access controls, protect systems from infiltration electronically
6. Protecting systems from a Trojan horse and providing authentication for login would be ---------------- controls.
Protecting systems from a Trojan horse and providing authentication for login would be logical access controls.
7. 2 types of controls that logical access controls provide?
Authentication (only authorized users can have access through a user ID or a digital signature on a message)

8. A company that annually reviews its investment opportunities and selects appropriate capital expenditures for the coming year is presented with two projects, called Project A and Project B. Best estimates indicate that the investment outlay for Project A is \$30,000 and for Project B is \$1 million. The projects are considered to be equally risky. Project A is expected to generate cash inflows of \$40,000 at the end of each year for two years. Project B is expected to generate cash inflows of \$700,000 at the end of the first year and \$500,000 at the end of the second year. The company has a cost of capital of 8%. What is the net present value (NPV) of each project when the cost of capital is zero?
When the cost of capital is zero, the NPV is simply the sum of a project's undiscounted cash flows:

NPV = Cash inflows - Initial outlay

NPV for A = \$ 40,000 + \$ 40,000 - \$   30,000 = \$50,000

NPV for B = \$700,000 + \$500,000 - \$1,000,000 = \$200,000
9. Caroline Brown, the product manager for a U.S. computer manufacturer, is being asked to quote prices of desktop computers to be used in Kuwait. The Kuwaiti government wants the price quoted in British pounds, for delivery next year. Brown knows that the general price level in the United States is expected to increase by 3%. Her banker forecasts that the British pound will depreciate about 5% this year with respect to the U.S. dollar. If Brown is able to quote 700 pounds for immediate delivery, the price that should be quoted for delivery to Kuwait next year is:
757 pounds

If the price of a desktop computer is presently 700 British pounds, a 3% increase in price will increase it to 721 pounds. If the pound is expected to depreciate by 5%, that is losing 5% of its value against the dollar, the cost of the computer in terms of British pounds will increase further. In this case, it rises by an additional 36 British pounds (5% of 721). The quoted price for delivery to Kuwait next year should be 757 pounds.
10. A system where several minicomputers are connected for communication and data transmission purposes, but where each computer can also process its own data, is known as a:
distributed data processing network.
11. ------------------------------ is a network of interdependent computers where certain functions are centralized and other functions are decentralized and processing is shared among two or more computers
Distributed data processing is a network of interdependent computers where certain functions are centralized and other functions are decentralized and processing is shared among two or more computers
12. In a ---------------------------------------, each computer can also process its own data.
In a distributed data processing network, each computer can also process its own data.
13. A U.S. parent company is reviewing the cash flows from its international subsidiaries. In addition to exchange rate risk, which of the following items would be a primary consideration in the company's cash flow analysis?
Repatriation restrictions
14. ------------------------------------ limit the parent’s ability to receive cash from international subsidiaries
repatriation restrictions limit the parent’s ability to receive cash from international subsidiaries
15. What do Repatriation restrictions do?
repatriation restrictions limit the parent’s ability to receive cash from international subsidiaries
16. what are 2 prime considerations when reviewing cash flows from international subsidiaries
exchange rate risk

Repatriation restrictions
17. The Look Company is considering an investment that would require an initial investment of \$120,000. The investment would provide cash inflows of \$20,000 per year for 10 years, starting one year from today.

Look is trying to compute the internal rate of return for this investment.

On the line for 10 periods on the present value of an annuity factor table, the factor is 6.145 for 10%.

If the hurdle rate for acceptable projects is 10%, will the project be accepted?
Yes

As interest rates get higher, the factors for the same number of periods become smaller. This is because, as the interest rates become higher, the time value of the money becomes higher. This makes the present value of the money lower.

In this case, the factor of internal rate of return is 6:\$120,000 ÷ \$20,000 = 6

If the hurdle rate of return is 10%, with a factor of 6.145, then the actual rate of return will be greater than 10%, and the project will be accepted.
18. A ----------------------- will be paid out in regular installments (monthly, quarterly, or annually) varying only with the payout method elected.
A fixed annuity will be paid out in regular installments (monthly, quarterly, or annually) varying only with the payout method elected.
19. A --------------------------- will pay out a variable amount in regular installments. The amount of payout varies with the value of the account.
A variable annuity will pay out a variable amount in regular installments. The amount of payout varies with the value of the account.
20. What is a fixed annuity?
A fixed annuity will be paid out in regular installments (monthly, quarterly, or annually) varying only with the payout method elected.
21. What is a variable annuity?
A variable annuity will pay out a variable amount in regular installments. The amount of payout varies with the value of the account.
22. All ------------------------------- proceeds that remain inside the annuity accumulate tax-deferred.
All capital and investment proceeds that remain inside the annuity accumulate tax-deferred.
 Author: Joens1313 ID: 310257 Card Set: BEC REVIEW 3 Updated: 2015-10-25 21:08:59 Tags: BEC REVIEW Folders: Description: BEC REVIEW 3 Show Answers: