98.If Pascal Company's turnover (asset utilization) measure is 2.5 and its margin is 7.5%, its ROI is 18.75%.
True False
99.Any investment opportunity with a return on investment that equals or exceeds the company's required rate of return should be accepted.
True False
100.Any investment opportunity with a residual income that equals or exceeds the company's required rate of return should be accepted.
True False
101.The preferred method for establishing transfer prices for transactions between divisions of the same firm is to base the transfer price on some form of competitive market price.
True False
102.When a market-based transfer price is not possible, a transfer price imposed by upper management should preserve a sense of fairness among the divisions of the company affected by the transfer.
True False
103.A decentralized company should try to minimize autonomy among the managers of its divisions and departments.
True False
104.The most desirable way to set a transfer price is to base it on either variable cost or total cost.
True False
105.A cost-based transfer price should be based on standard unit costs, not actual costs.
True False
106.In a potential transfer price situation, if the supplying division is operating at capacity in making sales to outside customers, it should be required to accept a transfer price that would lower its overall profitability because doing so will increase total firm profitability.
True False