MULTIPLE ANSWER QUESTIONS - Please skip them all or skip them entirely. Thank you!

13) Controllable margin is most useful for

1. external financial reporting.
2. preparing the master budget.
3. performance evaluation of profit centers.
4. break-even analysis

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14) Which statement is true?

1. An investment center is responsible for revenues and expenses, as well as earning a return on assets.
2. An investment center is only responsible for its investments.
3. An investment center is only responsible for revenues and expenses.
4. A profit center is evaluated using contribution margin, while an investment center is evaluated using ROI.

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15) Top management can control

a. only controllable costs.

b. only noncontrollable costs.

c. all costs.

d. some noncontrollable costs and all controllable costs.

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16) A company's cost of capital refers to

a. rate the company must pay to obtain funds from creditors and stockholders.

b. total cost of a capital project.

c. cost of printing and registering common stock shares.

d. rate of return earned on common stock

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17) The annual rate of return is computed by dividing expected annual

a. cash inflows by average investment.

b. net income by average investment.

c. cash inflows by original investment.

d. net income by original investment.

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18) The payback period is often compared to an assets

a. estimated useful life.

b. warranty period.

c. net present value.

d. internal rate of return.