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Performance Measurement – MCQs
26 questions. Click to practice.
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Correct options are highlighted when revealed.
1.
How do you determine the total assets employed using total available assets and idle assets?
market capitalization
net assets in use
total assets on hand
equity of shareholders
2.
What are the formal information systems within organizations called that guide the company’s learning and focus on critical strategic matters?
interactive control system
belief frameworks
boundary frameworks
diagnostic monitoring systems
3.
Which financial metric is calculated by deducting the rupee value of the required return on investment from the income?
net profit
income after taxes
residual income
operating profit
gross income
4.
The economic value added (EVA) approach is a particular technique used to determine which of the following?
net profit
gross income
residual income
residual capital
operating income
5.
What represents the after-tax average expense of the capital a company utilizes over the long term?
Weighted average cost of capital
Economic value added
Net operating profit after tax
Net earnings
6.
What term describes an individual's drive to perform well for their own personal satisfaction?
intrinsic motivation
external motivation
financial incentive
limited motivation
none of the above
7.
Which financial metric is determined by dividing income by investment?
profit margin
asset turnover ratio
net residual income
return on investment
equity multiplier
8.
Given that the working capital amounts to $265,000 and current liabilities total $378,000, what is the value of the current assets?
$113,000
$643,000
$743,000
$543,000
9.
What term is used to describe the total amount of assets employed to produce income?
DuPont analysis
rate of return
investment
asset turnover
10.
What is the result when you subtract working capital from current assets?
current liabilities
long-term debts
net asset value
net residual income
fixed assets
11.
Given current assets of $250,000 and current liabilities of $135,500, what is the value of the working capital?
$3,855,500
$314,500
$214,500
$114,500
12.
What financial metric is determined by subtracting current liabilities from current assets?
cost of capital opportunity
net working capital
aggregate long-term assets
average weighted cost of capital
13.
Which system within an organization defines the company's purpose, mission, and fundamental values?
interactive management system
belief system
boundary management system
diagnostic management system
14.
Given an operating income of $5,650,000 and total revenue of $68,558,000, what is the return on sales ratio?
8.24%
7.24%
9.24%
10.24%
None of the above
15.
Which metric is obtained by dividing operating income by total revenues?
residual profit
after-tax operating return
operating profit margin
investment return
16.
Given a required rate of return of 13%, an operating income of $375,000, and a total investment amounting to $2,650,000, what is the residual income?
$30,500
$20,500
$25,500
$32,500
17.
Which term is another name for the return on investment?
accrual accounting return rate
accounting return rate
nominal return rate
both A and B
18.
What is the name of the organizational system that sets the limits for acceptable behavior and establishes the code of conduct?
system for interactive control
system based on organizational beliefs
system that defines boundaries
system for diagnostic monitoring
19.
What is the result when you add working capital to current liabilities?
notional assets
leftover assets
current assets
token assets
20.
Which financial metric is determined by multiplying return on sales with investment turnover?
Residual income
Return on investment
Profit margin
Asset turnover
Operating income
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