ACC 202 FINAL PAPER VIEW AHEAD EXAM
2026 GRADED A+
⫸ The use of return on investment (ROI) as a performance measure
may lead managers to reject a project that would be favorable for the
company as a whole. Answer: true
⫸ If a company contains a number of investment centers of differing
sizes, return on investment (ROI) should be used rather than residual
income to rank the financial performance of the divisions. Answer:
true
⫸ Which of the following is not typically a performance measure
category on a balanced scorecard? Answer: innovation
⫸ Delivery cycle time is an example of which performance measure
category? Answer: internal business processes
⫸ If the MCE is equal to 0.6, then 60% of the time a unit is in
process is spent on activities that add value to the product. Answer:
true
⫸ Which of the following costs are always irrelevant in decision
making? Answer: sunk costs
,⫸ The term capital budgeting describes how companies: Answer:
plan significant investments in projects that have long-term
implications.
⫸ Which of the following is not an example of a typical capital
budgeting decision? Answer: The decision to reduce or maintain this
year's advertising budget.
⫸ Which of the following statements is false regarding the net
present value method? Answer: A net present value of zero indicates
that the project should be rejected.
⫸ Which of the following statements is true regarding the internal
rate of return? Answer: It represents the rate of return earned by an
investment project.
⫸ Which of the following is not an advantage of decentralization?
Answer: It enables lower-level managers to focus on achieving their
own objectives rather than focusing on the overall goals of the
company.
⫸ A responsibility center is best described as: Answer: any part of an
organization whose manager has control over and is accountable for
cost, profit, or investments.
⫸ A manager of a cost center is most likely to be evaluated using a:
Answer: variance analysis performance report.
, ⫸ A manager of a profit center is most likely to be evaluated using a:
Answer: properly formatted segmented income statement.
⫸ A manager of an investment center is most likely to be evaluated
using a: Answer: financial measure such as residual income.
⫸ Which of the following would not be included in operating assets
in return on investment calculations? Answer: Factory building rented
to (and occupied by) another company.
⫸ An advantage of using ROI to evaluate performance is that it
encourages the manager to reduce the investment in operating assets
as well as increase net operating income. Answer: true
⫸ Some investment opportunities that should be accepted from the
viewpoint of the entire company may be rejected by a manager who is
evaluated on the basis of: Answer: return on investment
⫸ Which of the following measures of performance encourages
continued expansion by an investment center so long as it is able to
earn a return in excess of the minimum required return on average
operating assets? Answer: residual income
⫸ BR Company has a contribution margin of 40%. Sales are
$312,500, net operating income is $25,000, and average operating
2026 GRADED A+
⫸ The use of return on investment (ROI) as a performance measure
may lead managers to reject a project that would be favorable for the
company as a whole. Answer: true
⫸ If a company contains a number of investment centers of differing
sizes, return on investment (ROI) should be used rather than residual
income to rank the financial performance of the divisions. Answer:
true
⫸ Which of the following is not typically a performance measure
category on a balanced scorecard? Answer: innovation
⫸ Delivery cycle time is an example of which performance measure
category? Answer: internal business processes
⫸ If the MCE is equal to 0.6, then 60% of the time a unit is in
process is spent on activities that add value to the product. Answer:
true
⫸ Which of the following costs are always irrelevant in decision
making? Answer: sunk costs
,⫸ The term capital budgeting describes how companies: Answer:
plan significant investments in projects that have long-term
implications.
⫸ Which of the following is not an example of a typical capital
budgeting decision? Answer: The decision to reduce or maintain this
year's advertising budget.
⫸ Which of the following statements is false regarding the net
present value method? Answer: A net present value of zero indicates
that the project should be rejected.
⫸ Which of the following statements is true regarding the internal
rate of return? Answer: It represents the rate of return earned by an
investment project.
⫸ Which of the following is not an advantage of decentralization?
Answer: It enables lower-level managers to focus on achieving their
own objectives rather than focusing on the overall goals of the
company.
⫸ A responsibility center is best described as: Answer: any part of an
organization whose manager has control over and is accountable for
cost, profit, or investments.
⫸ A manager of a cost center is most likely to be evaluated using a:
Answer: variance analysis performance report.
, ⫸ A manager of a profit center is most likely to be evaluated using a:
Answer: properly formatted segmented income statement.
⫸ A manager of an investment center is most likely to be evaluated
using a: Answer: financial measure such as residual income.
⫸ Which of the following would not be included in operating assets
in return on investment calculations? Answer: Factory building rented
to (and occupied by) another company.
⫸ An advantage of using ROI to evaluate performance is that it
encourages the manager to reduce the investment in operating assets
as well as increase net operating income. Answer: true
⫸ Some investment opportunities that should be accepted from the
viewpoint of the entire company may be rejected by a manager who is
evaluated on the basis of: Answer: return on investment
⫸ Which of the following measures of performance encourages
continued expansion by an investment center so long as it is able to
earn a return in excess of the minimum required return on average
operating assets? Answer: residual income
⫸ BR Company has a contribution margin of 40%. Sales are
$312,500, net operating income is $25,000, and average operating
