7. If the shadow price of a unit of constraint is $10, what will happen to the objective function if 20 additional units can be acquired (assuming this is within an allowable range)? Increase by $10 c. Increase by $125 b. Increase by $200 d. Nothing will happen a. 8. Consider this partial report from a Solver sensitivity report: Cutting department time used: Shadow price = $2; The maximum constraint = 150 hours; The allowable increase = 90 and the allowable decrease = 50. What is the range of hours available over which the shadow price will remain valid? 100 to 240 c. 130 to 270 b. 140 to 200 d. 150 to infinity a. 9. In a decentralized organization, Co. X, Division A is evaluated according to ROI, while Division B is evaluated according to residual income. Of Cox, Div. A and Dix.B, which is more likely to make an investment decision that will hurt Co. X's income? Co. X c. Division B b. Division A d. All are equally likely to do this a. 10. Division A, an investment center, has operating income = $80,000 for the prior period. The residual income during this period is $20,000. If Division A's investment assets = $300,000, then cost of capital set by the corporation's top management must be: 12% c. 20% b. 15% d. 25% a. 11. A division manager is considering investing in a new product. The division's income is currently $465,000 with operating assets of $8 million. The new product would increase income by $270,000 and would require an additional investment in equipment of $1.5 million. The ROI of the division before and after the investment is respectively: 5.8% and 7.7% c. 7.7% and 5.8% b. 11.6% and 15.8% d. Cannot determine a