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Please answer all questions. Red x mean incorrect question please answer. 2. Which performance metric would be most appropriate to evaluate the performance of an

Please answer all questions. Red x mean incorrect question please answer.

2. Which performance metric would be most appropriate to evaluate the performance of an investment center manager when the potential for managerial conflicts of interest is high?

a. Residual Income RI

b. Internal rate of return IRR

c. Return on Investment ROI

3. What is the general economic rule to set transfer prices?

a. Set the transfer price at the variable production cost plus any opportunity cost of the transfer.

b. Set the transfer price at the market price of the product.

c. Set the transfer price at the absorption cost.

5. Which of the following statements about the Balanced Scorecard is true?

a. An effective balanced scorecard will create a strategy map and validate the cause-and-effect relationships between measures in the four perspectives and financial outcomes.

b. The four balanced scorecard perspectives used by all companies are the: operational, investing, financing, and customer perspectives.

c. A balanced scorecard is commonly used to evaluate investment decisions.

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