Question 1

Capital Budgeting Decisions are:
A)Reversible
B)Irreversible
C)for short term
D)involves small amount

Accepted Answer

Capital budgeting decisions are often irreversible, meaning once made, they cannot be undone without incurring significant costs. These decisions typically involve large sums of money and are intended for long-term investments in projects or assets.

Question 2

Which of the following is not incorporated in Capital Budgeting?
A)Tax-Effect
B)Time Value of Money
C)Required Rate of Return
D)Rate of Cash Discount

Accepted Answer

Capital budgeting incorporates the tax effect, time value of money, and required rate of return to evaluate long-term investments. The rate of cash discount is not typically a factor in capital budgeting decisions, as it relates more to short-term financial management and incentives for early payment rather than long-term investment analysis.

Question 3

PERT / CPM have to be used for proper ……………….. of all projects
A)planning
B)controlling
C)staffing
D)coordinating

Accepted Answer

B

Question 4

BSC is important for ………
A)creating strategy
B)controlling strategy
C)evaluating the performance of a strategy
D)mapping strategy

Accepted Answer

The Balanced Scorecard (BSC) is primarily used for evaluating the performance of a strategy by measuring various performance metrics.

Question 5

Classification of responsibility center is based on the nature of the monetary ……………
A)Inputs and/or outputs
B)Inputs and outputs
C)Inputs only
D)Outputs only

Accepted Answer

Responsibility centers are classified based on the nature of the monetary inputs and/or outputs they deal with, as this determines how their performance is measured and managed.

Question 6

Discretionary expenses are expenses ………
A)that do not create value
B)that do not hamper the operations immediately
C)that are completely unnecessary
D)that are necessary

Accepted Answer

Discretionary expenses are costs that a business or individual can live without if necessary. These expenses are often deemed non-essential and can be delayed or cut from the budget without immediate harm to the core operations or living standards.

Question 7

For the board of directors of the company, the entire company is a ……………….
A)Profit center
B)Expense center
C)Responsibility center
D)Investment center

Accepted Answer

The entire company is considered a "Responsibility center" for the board of directors because they are responsible for overseeing the company's strategic direction, financial performance, and operational effectiveness, making decisions that impact the entire organization.

Question 8

In a revenue center the primary measurement is ………………….
A)Output in physical terms
B)Input in cost terms
C)Revenue
D)Cost incurred by center

Accepted Answer

In a revenue center, the primary measurement is revenue. This is because the focus is on generating income through sales or services, rather than on controlling costs or managing investments.

Question 9

In case of discretionary expense center, the financial center is primarily exercised at ………. Stage.
A)Implementation
B)Quality control
C)Output
D)Planning

Accepted Answer

In a discretionary expense center, financial control is primarily exercised at the planning stage. This is because discretionary expenses are those for which budgets are established primarily through the planning process, rather than being directly linked to a specific level of output or activity.

Question 10

In case of revenue center the output is measured in ……………. terms, but no formal attempt is made to relate ……………….
A)Physical, quantity and quality
B)Monetary, efficiency and effectiveness
C)Monetary, input and output
D)Monetary, output only

Accepted Answer

In a revenue center, the output is measured in monetary terms, but there is no formal attempt to relate input and output.

Question 11

In financial performance measurement most important is ……………
A)EVA
B)ROI
C)Profit Margin
D)MVA

Accepted Answer

EVA (Economic Value Added) is considered the most important as it measures the true economic profit of a company, reflecting the value created beyond the required return of the company's shareholders.

Question 12

Performance management is …………….
A)Strategic tool
B)Re-engineering tool
C)Business process
D)Strategic management tool

Accepted Answer

The answer of Performance management is …………….
A)Strategic tool
B)Re-engineering tool
C)Business process
D)Strategic...

Question 13

Profit centre profit is calculated ……....
A)before debiting Corporate overheads
B)after debiting corporate overheads
C)without considering corporate overheads
D)along with corporate overhead

Accepted Answer

The answer of Profit centre profit is calculated ……....
A)before debiting...

Question 14

A major part of strategy implementation is …….
A)Planning
B)Communication
C)Resource allocation
D)Monitoring

Accepted Answer

Resource allocation is a major part of strategy implementation because it ensures that the necessary resources are available to execute the strategy.

Question 15

The Enterprise Performance Management core processes does not include which of the following?
A)Financial Planning
B)Operational Planning
C)Business Analytics
D)Consolidation and Reporting

Accepted Answer

Business Analytics is not considered a core process of Enterprise Performance Management (EPM). EPM focuses on the management of an organization's performance, through processes like financial planning, operational planning, and consolidation and reporting, to ensure that goals are consistently being met in an efficient manner. Business Analytics, while related, is more about analyzing data to understand business performance and make predictions, rather than managing that performance directly.

Question 16

The Malcolm Baldrige Award is awarded by the Government of ……….
A)Japan
B)Russia
C)U.K.
D)U.S.A.

Accepted Answer

The Malcolm Baldrige Award is awarded by the Government of the United States of America. It recognizes U.S. organizations in business, health care, education, and nonprofit sectors for performance excellence.

Question 17

The responsibility center whose inputs are measured in monetary terms, but whose output is not, is ………………..
A)Revenue center
B)Expense center
C)Profit center
D)Investment center

Accepted Answer

Expense centers are evaluated based on the inputs (costs or expenses) in monetary terms, but their outputs are not directly measured in monetary terms. This contrasts with revenue centers (focused on generating income), profit centers (focused on both revenue and costs), and investment centers (evaluated on the use of capital as well as profit).

Question 18

Two step transfer prices depend on ……………….
A)ROI requirement
B)profit requirement
C)corporate profit requirement
D)SBU profit requirement

Accepted Answer

Two step transfer prices are designed to align with the corporate profit requirement, ensuring that the pricing strategy supports the overall financial goals of the corporation.

Question 19

Which of the following does not belong to the category of quantitative performance indicators?
A)Number of
B)Proportion of
C)Levels of
D)Amount of

Accepted Answer

Quantitative performance indicators are typically expressed in numerical terms, such as "number of," "proportion of," and "amount of." "Levels of" can indicate a qualitative assessment, such as levels of satisfaction or levels of agreement, which do not always translate directly into a numerical value.

Question 20

Which of the following is correct? ROI =
A)Income / Asset employed
B)Revenue / Asset employed
C)Cost / Revenue
D)Profit / No. of shares outstanding

Accepted Answer

ROI, or Return on Investment, is calculated as Income (or Profit) divided by Assets Employed. This measures the efficiency of an investment in generating income relative to the assets used in the investment.

Quiz 1: Key Concepts in Performance Management and Finance

Capital Budgeting Decisions are:

Which of the following is not incorporated in Capital Budgeting?

PERT / CPM have to be used for proper ……………….. of all projects

BSC is important for ………

Classification of responsibility center is based on the nature of the monetary ……………

Discretionary expenses are expenses ………

For the board of directors of the company, the entire company is a ……………….

In a revenue center the primary measurement is ………………….

In case of discretionary expense center, the financial center is primarily exercised at ………. Stage.

In case of revenue center the output is measured in ……………. terms, but no formal attempt is made to relate ……………….

In financial performance measurement most important is ……………

Performance management is …………….

Profit centre profit is calculated ……....

A major part of strategy implementation is …….

The Enterprise Performance Management core processes does not include which of the following?

The Malcolm Baldrige Award is awarded by the Government of ……….

The responsibility center whose inputs are measured in monetary terms, but whose output is not, is ………………..

Two step transfer prices depend on ……………….

Which of the following does not belong to the category of quantitative performance indicators?

Which of the following is correct? ROI =