1. Which of the following measures is not used to evaluate the general financial success or failure of investment centers?
   1. Residual income
   2. Return on Investment
   3. Number of suppliers
   4. Economic value added
   5. All of these measures are used

2. For purpose of decision making, avoidable costs are costs that:
   1. Were not incurred in the past
   2. Will be incurred in the future based on the alternative chosen
   3. Differ between alternatives
   4. All of the above are true
   5. None of the above is correct
3. The discount rate at which present value of cash outflows equals present value of cash inflows for an investment is the:
   1. Payback rate of return
   2. Net present value rate of return
   3. Internal rate of return
   4. Simple rate of return

4. The holder Division of Extraordinary Enterprises has a residual income of $450,000. Holders management is contemplating an investment opportunity that will increase this amount to $500,000 but reduce the divisional ROI by 1%. The investment:
   1. Should not be pursued because it is unattractive from both the divisional and corporate perspectives
   2. Should be pursued because it is attractive from both the divisional and corporate perspectives
   3. Should not be pursued because it is unattractive from the divisional perspective although it is attractive from the corporate perspective
   4. Should be pursued because it is attractive from the divisional perspective although not from the corporate perspective
   5. Could be pursued because it is attractive from the corporate perspective although not from the divisional perspective