8. Capital rationing is ideal for: Profit center c. Mutually exclusive projects Investment center e, Independent projects. 9. A profit center is: a. A responsibility center that always report profit b. responsibility center that incurs costs and generates revenues c, Evaluated by the rate ofreturm earned on the investment allocated to the center d. Referred to as a loss center when operations do not meet the company's objectives 10. Capital budgeting is the process a. used in sell or process further decisions. b, of determining how much capital stock to issue. c. of making capital expenditure decisions. d. of eliminating unprofitable product lines. 11. Net annual cash flow can be estimated by a. deducting credit sales from nct income. b, adding depreciation expense to net income. c. deducting credit purchases from net income. d, adding advertising expense to net income. 12. Which of the following is not a typical cash flow related to equipment purchase and replacement decisions? a. Increased operating costs b. Overhaul of equipment c. Salvage value of equipment when project is complete d. Depreciation expense 13. Which of the following is not a capital budgeting decision? a. Constructing new studios b. Replacing old equipment c. Scrapping obsolete inventory d. Remodeling an office building 14. The primary capital budgeting method that uses discounted cash flow techniques is the a. net present value method. b. cash payback technique. c. annual rate of return method. d. profitability index method. 15. An unfavorable material quantity variance would occur if a. More material were purchased than were used b. Actual pounds off material used were less than the standard pounds allowed c. Actual labor hours used were greater than standard labor hours allowed d. Actual pounds of material used were greater than the standard pounds allowed