1._______ Division A's assets are $500,000; sales are $1,200,000; and income is $300,000.What is the return on investment (ROI)?

A)1.67

B)0.60

C)0.25

D)0.42

2._______ Which statement is FALSE regarding residual income?

A)It measures investment center performance in dollars.

B)It cannot be used to accurately compare the performance of divisions of different sizes.

C)A manager will likely accept an investment if it increases residualincome.

D)Net assets are used as the evaluation base.

3.________ Which of the following is not a step in preparing a segment report?

A) Identify all segments.

B)Determine the transfer price between segments.

C)Assign direct costs to the segments.

D)Allocate indirect costs to the segments (if applicable).

4._______ Which capital budgeting models consider the time value of money?

A)Net present value and payback period

B)Accounting rate of return and internal rate of return

C)Net present value and internal rate of return

D)Payback period and accounting rate of return

5._______ The balance scorecard is a comprehensive performance measurement system that includes both financial and operational measures.

A)True

B)False

6._______ Transfer pricing is the internal value assigned to a product or service that one division provides to another division within the same company.

A)True

B)False

7._______ ABC Company purchases a piece of machinery for $40,000.The company anticipates annual operating cash inflows of $10,000 andannual net income of $5,000.The payback period is 8 years.

A)True

B)False

8.______ Which risks should management consider in the evaluation of capital expenditures?

A)Customers' demand for the product or service

B)Disposal value

C)Cost of the initial investment

D)All of the above.

9.______ Depreciation is a cash expense that provides a tax shield from income taxes.

A)True

B)False

10.______ When considering a capital project, a company should consider the initial investment costs, the operating receipts and expenditures duringoperations, and the disposal or salvage value at the end of the investment period.

A)True

False