7. Which of the following types of responsibility centre is typically evaluated in terms of whether or not the profit divided by the amount of investment exceeds a certain percentage? a) Investment centre bj Cost centre Profit centre d) Any responsibility centre 4 8. Which of the following is a disadvantage of decentralization? a) Decentralization is a form of motivation. bj Reactions to problems are slower in decentralized organizations. Information systems are simplified in a decentralized system Short term decisions can be harmful in the long run in a decentralized environment. 9. What purpose does economic value added (EVA) serve? ") Identifies proven strategies for decreasing the market value of the organization. b) Identifies low return projects and redirects resources into them. () Makes strategic decisions that ensure optimal use of capital d) Makes operational decisions that ensure optimal use of capital 10. Which of the following is NOT an advantage of the balance scorecard (BSC) for evaluating manager's performance? a) In covers the range of activity over the short term only. b) It covers the range of activity over the long term only. c) It forces the company to cover the range of activities that lead to success, not just short term financial criteria. d) It is subject to manipulation