Question 1

Amex Textiles contains a unit that produces textiles for a small, highly specialized market in Eastern Europe. This unit is referred to as a _______.
A)strategic business unit or SBU
B)strategic production unit or SPU
C)strategic growth unit or SGU
D)strategic industry unit or SIU

Accepted Answer

Amex Textiles contains a unit that produces textiles for a small, highly specialized market in Eastern Europe. This unit is referred to as Strategic Business Unit or SBU.
Key Takeaway: A strategic business unit (or SBU) is a unit that makes a product or offers a service to a unique group of customers. A small, highly specialized market in Eastern Europe qualifies as a unique group of customers. A large textile company would often have different SBUs with products geared towards unique groups of customers.

Question 2

When analyzing a company initially, it is important to tally its resources. Company resources are its _________ and _________.
A)profits: losses
B)growth; shrinking
C)assets; competencies
D)assets; profits

Accepted Answer

When analyzing a company initially, it is important to tally its resources. Company resources are its assets and competencies.
Key Takeaway: Companies accumulate resources during their operations that must be examined during business analysis. A company's resources are its assets such as physical properties and merchandise. Another resource is the accumulated knowledge, skills, and expertise of its employees which is considered its competencies. For example, a computer hardware company's assets are its physical properties and the accumulated competencies of their staff such as programmers and executives.

Question 3

Companies such as IBM and Apple have the following non-financial indicators of performance EXCEPT _________.
A)market share
B)product quality
C)brand recognition
D)share prices

Accepted Answer

Companies such as IBM and Apple have a number of non-financial indicators of performance such as product quality, brand recognition and market share.
Key Takeaway: Non-financial indicators of performance are those indicators that are not quantifiable. Companies such as IBM have built reputations over many decades that ensure their placements in the market. Share prices are financial indicators of performance that can be analyzed period-over-period by a Business Analyst in a comprehensive effort to examine the company's functioning.

Question 4

According to the Business Analysis Book of Knowledge (BABOK), enterprise analysis is designed to fulfill the following goals EXCEPT __________.
A)identify business opportunities
B)build the organization's business architecture
C)conduct solution assessment and validation
D)identify the best project investment for the organization

Accepted Answer

According to the Business Analysis Book of Knowledge (BABOK), enterprise analysis is not designed to conduct solution assessment and validation.
Key Takeaway: Enterprise analysis presents the first step in a Business Analyst's examination of an organization. During this process, the Business Analyst helps key members of the organization identify business opportunities, best project investments, and build the organization's business framework. Presenting solutions to strategy problems occurs later in the business analysis process.

Question 5

According to the Balanced Scorecard by Kaplan and Norton (1996), the financial strategic goals of a company aim to ________.
A)manage how customers view the company
B)address finance and accounting outcomes of the company
C)increase the high-income earner bracket of customers
D)promote the functional performance of the company

Accepted Answer

According to the Balanced Scorecard by Kaplan and Norton (1996), the financial strategic goals of a company aim to address finance and accounting outcomes of the company.
Key Takeaway: In a Balanced Scorecard of a company, the finance and accounting figures and processes of a company are part of its overall financial strategic goals. For example, a Chief Financial Officer (CFO) may set financial goals such as earning 8% on sales, 12% on investments and 15% on assets in 2010. These figures become the basis for which business analysis determines whether strategic goals have been met.

Question 6

According to the Balanced Scorecard by Kaplan and Norton (1996), the customer strategic goals of a company aim to ________.
A)manage how customers view the company
B)increase overall sales amongst growth areas of primary market
C)develop high-visibility products
D)promote the functional performance of the company

Accepted Answer

According to the Balanced Scorecard by Kaplan and Norton (1996), the customer strategic goals of a company aim to manage how customers view the company.
Key Takeaway: In a Balanced Scorecard of a company, managing how customers view the company is a customer strategic goal. For example, as part of their customer relationship management, the company can set goals of earning 90% satisfaction rates from all online customers who complete surveys. These figures, then, become the basis for which business analysis determines whether customer strategic goals have been met by staff.

Question 7

During enterprise analysis, the Business Analyst works with _______ and ________ to provide management with detailed information and insights about current project investments.
A)key stakeholders; subject matter experts
B)key stakeholders; 'C' level executives
C)subject matter experts; marketing specialists
D)'C' level executives; growth experts

Accepted Answer

During enterprise analysis, the Business Analyst works with key stakeholders and subject matter experts to provide management with detailed information and insights about current project investments.
Key Takeaway: During enterprise analysis, the Business Analyst must work closely with those members within the organization with expertise on current projects and how well they are running. These members include key stakeholders such as project managers and accountants, as well as subject matter experts. These two groups provide detailed information that a Business Analyst needs in enterprise analysis.

Question 8

According to the Balanced Scorecard by Kaplan and Norton (1996), the internal operations' goals of a company aim to _______.
A)promote new product development
B)increase core competency several folds in one fiscal year
C)increase process and functional performance of core competencies
D)minimize the tax impact of the company

Accepted Answer

According to the Balanced Scorecard by Kaplan and Norton (1996), the internal operations' goals of a company aim to increase process and functional performance of core competencies.
Key Takeaway: In a Balanced Scorecard of a company, the internal operations' goals of a company aim to increase process and functional performance of core competencies such as the production of specialized textiles. For example, as part of their internal operations' goals, the company can set goals to 'achieve inventory turns of 7.0 or better in 2010'. This inventory turn figure, then, become the basis for which business analysis determines whether internal operations' goals have been met.

Question 9

The ultimate goal of enterprise analysis is to provide recommendations on _________.
A)hiring or firing key stakeholders
B)reducing the tax burden of the company
C)selecting best projects for company investment returns
D)increasing the company's direct market shares in the upcoming fiscal year

Accepted Answer

The ultimate goal of enterprise analysis is to provide recommendations on selecting best projects for company investment returns.
Key Takeaway: The ultimate goal of enterprise analysis is for the Business Analyst to provide recommendation on the best projects that will bring returns on company investment. For example, Microsoft's launching of Windows 7 would have been the result of selecting this particular product based on customer needs and innovation. Chosen projects are those deemed after enterprise analysis to provide the best returns on investment for the company.

Question 10

According to the Balanced Scorecard by Kaplan and Norton (1996), the learning and innovation strategic goals of a company aim to address all of the following EXCEPT ___________.
A)technology application in the workplace
B)learning and skill development of employees
C)new product development
D)market segmentation needs

Accepted Answer

According to the Balanced Scorecard by Kaplan and Norton (1996), the learning and innovation strategic goals of a company aim to address technology application in the workplace, learning and skill development of employees, and new product development.
Key Takeaway: In a Balanced Scorecard of a company, promoting the overall learning and skill development as well as the introduction of technology and new products are part of the learning and innovation strategic goals. For example, as part of their learning and innovation strategy, the company can set goals of earning 10% on new product sales. This new product sales percentage, then, become the basis for which business analysis determines whether the innovation strategy has met its goals.

Question 11

__________ is one of the first steps in conducting enterprise analysis activities.
A)preparing customer satisfaction surveys
B)creating and maintaining the business architecture
C)selecting best projects for company investment returns
D)maximizing the company's tax shelter bracket

Accepted Answer

Creating and maintaining the business architecture is one of the first steps in conducting enterprise analysis activities.
Key Takeaway: Creating and maintaining the company's business architecture framework is one of the first steps in conducting enterprise analysis activities. This activity may include such sub-activities as examining the company's strategic goals and plans, and examining the current business architecture. The output for enterprise analysis may be gap analysis results that management can address in refining the new business architecture.

Question 12

DHL hires a Business Analyst to examine the impact of reducing deliveries to rural areas. During the initial phases of enterprise analysis, the Business Analyst prepares a(an) _______ study.
A)impact
B)downsizing
C)growth
D)feasibility

Accepted Answer

DHL hires a Business Analyst to examine the impact of reducing deliveries to rural areas. During the initial phases of enterprise analysis, the Business Analyst prepares a feasibility study.
Key Takeaway: During the initial phases of enterprise analysis, a Business Analyst must prepare a feasibility study that explores optimum business solutions. For example, the feasibility study may recommend ways that DHL reduce deliveries to rural areas but make up for any profit losses by expanding its business client sign-ups and providing incentives to new private clients. The feasibility study is about providing solutions to current business problems.

Question 13

Princeton University is interested in expanding its offerings to professional and mature students to compensate for expected undergraduate enrollment during the recession. A Business Analyst must _______ and __________ the new business opportunity.
A)scope; define
B)scope; segment
C)segment; promote
D)promote; advertise

Accepted Answer

Princeton University is interested in expanding its offerings to professional and mature students to compensate for expected undergraduate enrollment during the recession. A Business Analyst must scope and define the new business opportunity.
Key Takeaway: A Business Analyst must scope and define a new business opportunity while during enterprise analysis. Princeton University's Business Analyst must examine the educational needs of current professionals and mature students in order to align the university's offerings with their needs. By scoping and defining how well those needs match the current offerings, the Business Analyst can present this new business opportunity to management. For example, many current professionals may be interested in expanding their Information Technology (IT) knowledge by taking practical courses at the university.

Question 14

Jake is a Business Analyst commissioned to scope a new business opportunity for FedEx Kinko's. He must prepare and present a ________ that advocates for this new opportunity.
A)downsizing study
B)growth case
C)business case
D)feasibility study

Accepted Answer

Jake is a Business Analyst commissioned to scope a new business opportunity for FedEx Kinko's. He must prepare and present a business case that advocates for this new opportunity.
Key Takeaway: A business case provides justification to management and executives in a new company to take on an investment in a business opportunity. If Jake presents a business case to management at FedEx Kinko's that promotes graphics services to the public, he must present ways in this case that this venture will have a good return for the company in the future. A business case presents in detail why the company should invest money and time into a project.

Question 15

Despite a careful feasibility study and a well-researched business case, FedEx Kinko's may still be wary of the __________ in investing time and money into a Business Analysts' new business opportunity.
A)risks
B)gamble
C)market competition
D)doubt

Accepted Answer

Despite a careful feasibility study and a well-researched business case, FedEx Kinko's may still be wary of the risks in investing time and money into a Business Analysts' new business opportunity.
Key Takeaway: Conducting an initial risk assessment is the job of the Business Analyst during enterprise analysis, despite a careful feasibility study and a well-researched business case. For example, FedEx Kinko's may decide that a new venture may seem lucrative on paper but is much too risky to implement in the new year given the recession conditions in major cities. While the venture maybe a success in economic growth times, it risks failure in a recession; a risk assessment is designed to define these concrete risks.

Question 16

Following the risk assessment phase of enterprise analysis, a Business Analyst must present a __________ package to managers and executives.
A)pros-and-cons
B)decision
C)market analysis
D)financial ledger

Accepted Answer

Following the risk assessment phase of enterprise analysis, a Business Analyst must present a decision package to managers and executives.
Key Takeaway: After preparing a feasibility study, business case, and risk assessment, a business analysis concludes enterprise analysis activities with the presentation of a decision package to managers and executives. A decision package is one that presents all of the elements of enterprise analysis but a high level recommendation on which of the projects and ventures would provide the best returns on investment for the company.

Question 17

Of the choices below, this is the best evaluation criteria for selecting which projects to proceed with:
A)Payback Period of the investment
B)Internal Rate of Return
C)Net Present Value (NPV)
D)Example Value
E)Discount rate

Accepted Answer

Calculating the NPV or Net Present Value will help you see the true value in a project comparison. This allows you to view and apples to apples approach. If the investment or Net Present Value is positive then the project plan is going according to the overall plan.
Key Takeaway: A company should choose projects based on the highest NPV for the available capital that they have. Too often organizations make the mistake of using IRR or payback period. NPV is the best way to determine which projects to move forward with.

Question 18

A business analyst considers opportunity costs in their analysis.

Accepted Answer

You must consider opportunity costs when evaluating a project. By selecting one project, you are almost always choosing to perform that project over another one. Opportunity cost is the value of the next best alternative to the project you are selecting.
Key Takeaway: A company has a finite amount of capital to invest, so any expenditure, including a project, has an opportunity cost. The opportunity cost is what could have been done with that capital were it not deployed to the project.

Question 19

A good project manager considers sunk costs when considering which projects to proceed with.

Accepted Answer

Sunk costs have already been incurred and should not be used in deciding whether or not to move forward with a project or not.
Key Takeaway: You will hear so many times "We've already put so much into this project, we have to finish it!" Be gentle in the future when you correct people on this front. Remember, that it is not only cash, but emotional investment that managers often have in a project.

Question 20

A Business Analyst at CAGNI Insurance prepares a business case for a health incentives package to corporate clients. Managers are more likely to reject the business case if it ___________.
A)shows little profit in the first quarter
B)provides a much lower return of investment than desired
C)presents operational risks
D)provides innovative opportunities

Accepted Answer

A Business Analyst at CAGNI Insurance prepares a business case for a health incentives package to corporate clients. Managers are more likely to reject the business case if it provides a much lower return of investment than desired.
Key Takeaway: A business case study must convince managers and executives at a company that a project is worth the investment in resources. If the managers at CAGNI do not believe that the health incentives package to corporate clients will provide a sufficient return on investment, they may reject the business case or at least require modifications.

Quiz 1: Enterprise Analysis

Amex Textiles contains a unit that produces textiles for a small, highly specialized market in Eastern Europe. This unit is referred to as a _______.

When analyzing a company initially, it is important to tally its resources. Company resources are its _ and _.

Companies such as IBM and Apple have the following non-financial indicators of performance EXCEPT _________.

According to the Business Analysis Book of Knowledge (BABOK) , enterprise analysis is designed to fulfill the following goals EXCEPT __________.

According to the Balanced Scorecard by Kaplan and Norton (1996) , the financial strategic goals of a company aim to ________.

According to the Balanced Scorecard by Kaplan and Norton (1996) , the customer strategic goals of a company aim to ________.

During enterprise analysis, the Business Analyst works with _ and __ to provide management with detailed information and insights about current project investments.

According to the Balanced Scorecard by Kaplan and Norton (1996) , the internal operations' goals of a company aim to _______.

The ultimate goal of enterprise analysis is to provide recommendations on _________.

According to the Balanced Scorecard by Kaplan and Norton (1996) , the learning and innovation strategic goals of a company aim to address all of the following EXCEPT ___________.

__________ is one of the first steps in conducting enterprise analysis activities.

DHL hires a Business Analyst to examine the impact of reducing deliveries to rural areas. During the initial phases of enterprise analysis, the Business Analyst prepares a(an) _______ study.

Princeton University is interested in expanding its offerings to professional and mature students to compensate for expected undergraduate enrollment during the recession. A Business Analyst must _ and ____ the new business opportunity.

Jake is a Business Analyst commissioned to scope a new business opportunity for FedEx Kinko's. He must prepare and present a ________ that advocates for this new opportunity.

Despite a careful feasibility study and a well-researched business case, FedEx Kinko's may still be wary of the __________ in investing time and money into a Business Analysts' new business opportunity.

Following the risk assessment phase of enterprise analysis, a Business Analyst must present a __________ package to managers and executives.

Of the choices below, this is the best evaluation criteria for selecting which projects to proceed with:

A business analyst considers opportunity costs in their analysis.

A good project manager considers sunk costs when considering which projects to proceed with.

A Business Analyst at CAGNI Insurance prepares a business case for a health incentives package to corporate clients. Managers are more likely to reject the business case if it ___________.