2. Using differential analysis, if operating income is expected in increase and variable manufacturing cost are expected to increase, what would be the expected change to revenue?

a. increase

b. decrease

c. no change

d. could increase or decrease

3. A central element in an analysis regarding a product discontinuance are changes to variable costs, fixed cost and _______.

a. revenue

b. sunk costs

c. selling and administrative costs

d. manufacturing processes

4. Which method for evaluating capital investment proposals reduces the expected future net cash flows originating from the proposals to their present values?

a. Net present value

b. Average rate of return

c. Cash payback

d. Internal rate of return

5. Which method of evaluating capital investment proposals uses profitability to compute a rate of return?

a. net present value

b. payback

c. internal rate of return

d. accounting rate of return