1. A responsibility center in which a manager is responsible for both revenues and costs is a(n)

a. cost center.

b. revenue center.

c. profit center.

d. investment center

e. None of these.

2. Which of the following results from decentralization?

a. It results in better local decision-making by central management as they are in contact with immediate operating conditions. b. It results in better implementation of decisions as central management is charged with both making and implementing decisions. c. It results in the usage of a firm's resources to maximize firm value by the lower-level managers. d. It results in enhanced competition as segments are protected from dealing with market forces. e. All of these.

3. Which of the following formulas is used to calculate the inventory turnover ratio?

a. Cost of Goods Sold / Ending Inventory

b. Sales / Beginning Inventory

c. Cost of Goods Sold / Average Inventory

d. Sales / Total Inventory

4. The Balanced Scorecard perspective that describes the internal processes needed to provide value for customers and owners is the ____ perspective.

a. customer

b. internal business process

c. learning and growth

d. financial

e. None of these.

5. Which of the following is preferred by managers when the risk of obsolescence is high?

a. A short payback period

b. A high opportunity cost

c. A low accounting rate of return

d. All of these

e. None of these

6. Which of the following refers to the minimum acceptable rate of return?

a. The standard rate

b. The contribution margin

c. The cost of capital

d. The future rate

e. All of these

7. Which of the following is true if net present value (NPV) is negative?

a. The return on investment is less than the discount rate.

b. The return on investment is more than the discount rate.

c. The return on investment is equal to the discount rate.

d. The return on investment is equal to the growth rate.

e. The return on investment is greater than the growth rate.

8. Which of the following methods assumes that each cash inflow is reinvested at the rate at which the present value of a project's cash inflows equal the present value of its cash outflows?

a. The net present value

b. The average rate of return

c. The ratio analysis

d. The internal rate of return

e. None of these