1) The Y Corp. has total assets of $4,000 and total liabilities of $1,000. Its equity must equal:

a. Zero

b. $1,000

c. $3,000

d. $5,000

2) The method of evaluating long term investment decisions that involves computing the interest rate at which the present value of future inflows exactly equals the cost of making the investment is called the:

a. Payback method

b. Internal rate of return method

c. Accounting rate of return method

d. Net present value method

3) The type of cost that exists when costs remain the same at certain levels of output, then jump to higher levels when the level of a cost driver increases past certain points, is a:

a. Fixed cost

b. Variable cost

c. Semivariable cost

d. Step cost