• Question 1

  2 out of 2 points

  

  An independent business segment where the manager is expected to earn profits appropriate for their level of assets would be an example of which type of responsibility center?

  Selected Answer:	d. Investment center
  Answers:	a. Cost center
  	b. Profit center
  	c. Revenue center
  	d. Investment center

• Question 2

  0 out of 2 points

  

  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?

  Selected Answer:	d. Internal rate of return (IRR)
  Answers:	a. Residual income (RI)
  	b. Net present value (NPV)
  	c. Return on investment (ROI)
  	d. Internal rate of return (IRR)

• Question 3

  0 out of 2 points

  

  What is the general economic rule to set transfer prices?

  Selected Answer:	b. Set the transfer price at the market price of the product.
  Answers:	a. Set the transfer price at the absorption cost.
  	b. Set the transfer price at the market price of the product.
  	c. Set the transfer price at the variable production cost.
  	d. Set the transfer price at the variable production cost plus any opportunity cost of the transfer.

• Question 4

  2 out of 2 points

  

  On which section of the statement of cash flows would you find the cash outlay for the purchase of new production equipment?

  Selected Answer:	a. The Investing Activities section
  Answers:	a. The Investing Activities section
  	b. The Production Activities section
  	c. The Financing Activities section
  	d. The Operating Activities section

• Question 5

  0 out of 2 points

  

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

  Selected Answer:	c. A balanced scorecard is commonly used to evaluate investment decisions.
  Answers:	a. The four balanced scorecard perspectives used by all companies are the: operational, investing, financing, and customer perspectives.
  	b. 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.
  	c. A balanced scorecard is commonly used to evaluate investment decisions.
  	d. The balanced scorecard for companies in any industry will measure the gross margin ratio (financial), the defect rate (internal), training hours (learning and growth) and customer satisfaction (customer).

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