1. Variable cost are costs that: a. vary in total directly and proportionately with changes in the activity level. b. both a and c c. remain the same per unit at every activity level. d. neither 2. The relevant range is: a. the range of activity in which variable costs will be curvilinear. b. the range over which the company expects to operate during a year. c. usually from zero to 100% of operating capacity. d. the range of activity in which fixed costs will be curvilinear. 3. Mixed cost consist of a : a. variable cost element and a relevant cost element. b. relevant cost element and a controllable cost element. c. fixed cost element and a controllable cost element. d. variable cost element and a fixed cost element. 4. If a payback period for a project is greater than its useful life, the a. project will always be profitable b. entire initial investment will not be recovered c. project will only be acceptable if the company's cost of capital was low d. project's return wll always exceed the company's cost of capital 5. The profitability index a. does not take ito account the discounted cash flows b. is calculated by dividing total cash flows by the initial investment c. allows comparison of the relative desirabilty of projects that require differing initial investment d. will never be greater than 1
