1. The decision to continue or discontinue a segment of the business should focus on:
sales minus total variable expenses and total fixed expenses.
sales minus total variable expenses and avoidable fixed expenses of the segment.
sales minus total variable expenses and allocated fixed expenses of the business.
None of these.
2. In order to calculate the net present value of a proposed investment, it is necessary to know:
the cash flows expected from the investment.
the net income expected from the investment.
the interest rate paid on funds borrowed to make the investment.
the cash dividends paid on the stock each year.