120+ Enterprise Performance Management (EPM) Solved MCQs

1.

Capital Budgeting Decisions are:

A. Reversible
B. Irreversible
C. for short term
D. involves small amount
Answer» B. Irreversible
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
Answer» D. Rate of Cash Discount
3.

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

A. planning
B. controlling
C. staffing
D. coordinating
Answer» B. controlling
4.

BSC is important for ………

A. creating strategy
B. controlling strategy
C. evaluating the performance of a strategy
D. mapping strategy
Answer» C. evaluating the performance of a strategy
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
Answer» A. Inputs and/or outputs
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
Answer» B. that do not hamper the operations immediately
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
Answer» C. Responsibility center
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
Answer» C. Revenue
9.

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

A. Implementation
B. Quality control
C. Output
D. Planning
Answer» D. Planning
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
Answer» C. Monetary, input and output
11.

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

A. EVA
B. ROI
C. Profit Margin
D. MVA
Answer» A. EVA
12.

Performance management is …………….

A. Strategic tool
B. Re-engineering tool
C. Business process
D. Strategic management tool
Answer» C. Business process
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
Answer» B. after debiting corporate overheads
14.

A major part of strategy implementation is …….

A. Planning
B. Communication
C. Resource allocation
D. Monitoring
Answer» C. Resource allocation
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
Answer» C. Business Analytics
16.

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

A. Japan
B. Russia
C. U.K.
D. U.S.A.
Answer» D. U.S.A.
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
Answer» B. Expense center
18.

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

A. ROI requirement
B. profit requirement
C. corporate profit requirement
D. SBU profit requirement
Answer» C. corporate profit requirement
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
Answer» C. Levels of
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
Answer» A. Income / Asset employed
21.

Which of the following is not a financial performance measure?

A. Opening cash flow
B. Return on assets
C. Market Cap
D. Market share/growth
Answer» D. Market share/growth
22.

Which of the following is not an entity with reference to Baldrige Criteria / Framework?

A. Team Focus
B. Customer Focus
C. Operations Focus
D. Work Force Focus
Answer» A. Team Focus
23.

The selective and analytical approach to control investment in various types of inventories is known as ……………………………

A. ABC Analysis
B. Gross Margin Return on Investment (GMROI)
C. Multiple Attribute Method
D. Sell Through Analysis
Answer» A. ABC Analysis
24.

The Sell Through Analysis is not about ………………………

A. Sales
B. Inventory/ Sales Turn Over
C. Sales Velocity
D. Merchandise Management
Answer» A. Sales
25.

The Non-profit Organization focus more on ………..

A. Social welfare/interests
B. Surplus generation
C. Funds mobilization
D. Governance
Answer» A. Social welfare/interests
26.

The time the activity would take if things did not go well is known as

A. Pessimistic time
B. Most likely time
C. Optimistic time
D. Average time
Answer» A. Pessimistic time
27.

Which of the following is responsible for establishing a private company’s internal control?

A. Management
B. Auditors
C. Management and auditors
D. Committee of Sponsoring Organizations
Answer» A. Management
28.

A responsibility center in which the manager is held accountable for the profitable use of assets and capital is commonly known as a(n)

A. Cost center
B. Revenue center
C. Profit center
D. Investment center
Answer» D. Investment center
29.

In the balanced scorecard approach quality would come under which perspective?

A. The internal perspective
B. The customer perspective
C. The financial perspective
D. The innovation and learning perspective
Answer» A. The internal perspective
30.

Performance management is believed to have originated from which country?

A. Japan
B. France
C. Denmark
D. USA
Answer» D. USA
31.

The overall purpose of the balanced scorecard approach is to:

A. Help turn strategy into action
B. Benchmark against competitors
C. Measure financial performance
D. Measure product quality
Answer» A. Help turn strategy into action
32.

The process of evaluating an employee’s current and/or past performance relative to his or her performance standards is called

A. recruitment
B. employee selection
C. performance appraisal
D. organizational development
Answer» C. performance appraisal
33.

The term 'EVA' is used for:

A. Extra Value Analysis
B. Economic Value Added
C. Expected Value Analysis
D. Engineering Value Analysis
Answer» B. Economic Value Added
34.

The U.S. National Quality Award is named after

A. Joseph Juran
B. Genichi Taguchi
C. W. Edwards Deming
D. Malcolm Baldrige
Answer» D. Malcolm Baldrige
35.

Which of the following statements is false? Balanced scorecards

A. Are one type of performance dashboard
B. Can be cascaded to different levels/parts of organisations
C. Cannot be used in conjunction with budgetary control systems
D. Can be used to produce strategy maps
Answer» C. Cannot be used in conjunction with budgetary control systems
36.

Which of the following statements regarding flaws suffered by financial measures is not correct:

A. They are hard to quantify
B. They do little to motivate employees to improve accounting profits
C. They are not effective in getting managers' attention
D. They are useful in identifying operational problems
Answer» D. They are useful in identifying operational problems
37.

Which of the following variable does ROI examine?

A. EBIT
B. EVA
C. ROI
D. DuPont chart
Answer» B. EVA
38.

A sound Capital Budgeting technique is based on:

A. Cash Flows
B. Accounting Profit
C. Interest Rate on Borrowings
D. Last Dividend Paid
Answer» A. Cash Flows
39.

Capital Budgeting deals with:

A. Long-term Decisions,
B. Short-term Decisions
C. Both (a) and (b)
D. Neither a) nor (b)
Answer» A. Long-term Decisions,
40.

Capital Budgeting Decisions are based on:

A. Incremental Profit
B. Incremental Cash Flows
C. Incremental Assets,
D. Incremental Capital.
Answer» B. Incremental Cash Flows
41.

Capital Budgeting is a part of:

A. Investment Decision
B. Working Capital Management
C. Marketing Management
D. Capital Structure
Answer» A. Investment Decision
42.

Which of the following is not applied in capital budgeting?

A. Cash flows be calculated in incremental terms
B. All costs and benefits are measured on cash basis
C. All accrued costs and revenues be incorporated
D. All benefits are measured on after-tax basis
Answer» C. All accrued costs and revenues be incorporated
43.

Which of the following is not followed in capital budgeting?

A. Cash flows Principle
B. Interest Exclusion Principle
C. Accrual Principle
D. Post-tax Principle
Answer» C. Accrual Principle
44.

Which of the following is not true for capital budgeting?

A. Sunk costs are ignored
B. Opportunity costs are excluded
C. Incremental cash flows are considered
D. Relevant cash flows are considered
Answer» B. Opportunity costs are excluded
45.

Which of the following is not used in Capital Budgeting?

A. Time Value of Money
B. Sensitivity Analysis
C. Net Assets Method
D. Cash Flows
Answer» C. Net Assets Method
46.

Which one is the Capital Expenditure?

A. Capital invested by the owner
B. Selling expense for machine
C. Machine purchased
D. Daily expenses to operate business
Answer» C. Machine purchased
47.

Who among the following have the authority to inspect the books of accounts?

A. Directors
B. Members
C. Officer of Sebi
D. Both (a) and (c)
Answer» D. Both (a) and (c)
48.

Under responsibility accounting, the evaluation of a manager’s performance is based on matters that the manager:

A. Directly controls
B. Directly and indirectly controls
C. Indirectly controls
D. Has shared responsibility for with another manager
Answer» A. Directly controls
49.

Return on Assets and Return on Investment Ratios belong to:

A. Liquidity Ratios
B. Profitability Ratios
C. Solvency Ratios
D. Turnover
Answer» B. Profitability Ratios
50.

………….. costs are not easily changed and are often fixed, for ex, once a company has decided to rent a place.

A. Committed
B. Discretionary
C. Engineered
D. Marginal
Answer» A. Committed
51.

Management by objective is the process in which

A. Top management sets objectives for the sub- ordinate managers
B. Budgeteer proposes to accomplish specific jobs and prepares budget for it.
C. A manager decides his own area of operations and prepares budget for it.
D. Budget is not prepared at all.
Answer» B. Budgeteer proposes to accomplish specific jobs and prepares budget for it.
52.

Return on Assets (ROA) ratio is given by which of the following?

A. Net Income/ Sales
B. Sales / Total Assets
C. Net Income/ Total Assets
D. Gross Margin/ Net Sales
Answer» C. Net Income/ Total Assets
53.

The Strategic Business Unit evolved during the ………………………

A. 1970s & 1980s
B. 1990s
C. 1960s
D. 21st Century
Answer» A. 1970s & 1980s
54.

The strategic Business Unit evolved from …………………

A. Hierarchy- based structure of organization
B. Function based structure of organization
C. Territorial structure of organization
D. Divisional structure of organization
Answer» D. Divisional structure of organization
55.

There are four elements of Anthony’s model. Which one does not belong to the group?

A. Detector
B. Assessor
C. Effecter
D. Rejecter
Answer» D. Rejecter
56.

Total control over discretionary expense center is achieved primarily through ……… performance measures.

A. Financial
B. Non-financial
C. Objective based
D. Output based
Answer» B. Non-financial
57.

Which of the following areas is not covered under the Baldrige Award?

A. Education
B. Health Care
C. Small Business
D. Multi National Corporation (MNC)
Answer» D. Multi National Corporation (MNC)
58.

Which of the following is an example of lead indication?

A. Market share
B. Net profit
C. Gross margin
D. ROI
Answer» A. Market share
59.

If project A has a lower payback period than project B, this may indicate that project A may have a …………….

A. Lower NPV and be less profitable
B. Higher NPV and be less profitable
C. Higher NPV and be more profitable
D. Lower NPV and be more profitable
Answer» C. Higher NPV and be more profitable
60.

The primary capital budgeting method that uses discounted cash flow techniques is the ……....

A. Net present value method
B. Cash payback technique
C. Annual rate of return method
D. Profitability index method
Answer» A. Net present value method
61.

Which of the following ignores the time value of money?

A. Internal rate of return
B. Profitability Index
C. Net present value
D. Cash payback
Answer» D. Cash payback
62.

Which of the following is not true? Asset employed is equal to

A. Non-current liabilities + shareholder’s equity
B. Total assets – current liabilities
C. Non-current assets + working capital
D. Shareholder’s equity –current liabilities
Answer» D. Shareholder’s equity –current liabilities
63.

As asset becomes Non Performing after default of ……………………

A. 180 days
B. 60 days
C. 90 days
D. 91 days
Answer» C. 90 days
64.

As per the RBI guidelines banks have to make sure that out of their loan assets                        loans are given to Priority Sector.

A. 20%
B. 40%
C. 50%
D. 45%
Answer» B. 40%
65.

The capital adequacy ratio to be maintained by public sector banks in India is ……………....

A. 8%
B. 10%
C. 10.5%
D. 12%
Answer» D. 12%
66.

The Retailer is selling the merchandise for more than it costs the Retailer to acquire it, then the GMROI Ratio would be ……………………

A. Higher than 1
B. Equal to 1
C. Less than 1
D. Equal to 3.2
Answer» A. Higher than 1
67.

Which of the following do not fall under Financial inclusion ?

A. Nationalization of Banks
B. Public Sector Lending targets
C. Zero Balance Accounts
D. Education at affordable cost
Answer» D. Education at affordable cost
68.

While calculating the Gross Margin Ratio on Investment (GMROI), the TWO important aspects are:

A. Stock on Hand and Stock-Outs incidents
B. Gross Margin and Average Inventory Cost
C. Gross Revenue and Stock on Hand
D. Carrying Costs and Stock-Out Costs
Answer» B. Gross Margin and Average Inventory Cost
69.

Assembling project team and assigning their responsibilities are done during which phase of project management?

A. Project Planning
B. Project Initiation
C. Project Controlling
D. Project Execution
Answer» B. Project Initiation
70.

PERT is the

A. Time oriented technique
B. Event oriented technique
C. Activity oriented technique
D. Target oriented technique
Answer» B. Event oriented technique
71.

Which of the following is not one of the eight specific principles of Social Audit?

A. Comprehensive
B. Comparative
C. Multi-directional
D. Non-Participatory
Answer» D. Non-Participatory
72.

Which of the following statement about NPOs is not true?

A. The NPOs generally tend to be service organisations
B. The NPOs receive ‘Contributed Capital’ and have no shareholders
C. The sources of funds for NPOs are more or less captive
D. The NPOs are subjected to Market Mechanism
Answer» D. The NPOs are subjected to Market Mechanism
73.

Which is not a primary objective of audit?

A. Detection and Prevention of Errors
B. Examining the System of internal check
C. Verifying the authenticity and validity of transactions
D. Confirming the existence and value of assets and liabilities
Answer» A. Detection and Prevention of Errors
74.

Which of the following area is not covered by management audit?

A. System and Procedures
B. Board’s / Directors Analysis
C. Research and development
D. New product development cycle time
Answer» D. New product development cycle time
75.

Which of the following area is specially covered by Management Audit?

A. Economic Contribution Analysis
B. Cost-Benefit Analysis
C. Social Cost-Benefit Analysis
D. Sensitivity Analysis
Answer» A. Economic Contribution Analysis
76.

Assuming that it is not the first appointment of the auditor, who is responsible for the appointment of the auditor?

A. The Shareholders in a general meeting
B. The Managing director
C. The board of directors in board meeting
D. The audit committee
Answer» A. The Shareholders in a general meeting
77.

A Balanced Scorecard helps the organisation to:

A. Be ready and prepared to implement an ERP
B. Be focus on all the relevant business perspectives
C. Integrate strategy and key challenges
D. Communicate better with staff
Answer» B. Be focus on all the relevant business perspectives
78.

A cost center manager

A. Does not have the ability to produce revenue
B. May be involved with the sale of new marketing programs to clients.
C. Would normally be held accountable for producing an adequate return on invested capital.
D. Often oversees divisional operations
Answer» A. Does not have the ability to produce revenue
79.

According to DuPont analysis, increase in the profit margin (all else constant) should

A. Increase both ROE and ROA
B. Increase ROE but not ROA
C. Increase ROA but not ROE
D. Increase neither ROA nor ROE
Answer» A. Increase both ROE and ROA
80.

DU PONT Analysis deals with

A. Analysis of Current Assets
B. Analysis of Profit
C. Capital Budgeting
D. Analysis of Fixed Assets
Answer» B. Analysis of Profit
81.

If return on investment is a measure used on the balanced scorecard, under which perspective would it be listed

A. Financial perspective
B. Customer perspective
C. Learning and growth perspective
D. Internal business perspective
Answer» A. Financial perspective
82.

Pitfalls exists the same as with any new technology or management tool. All of the following describe these pitfalls except

A. Some companies use too few measures in their score
B. Some companies include too many measures
C. A poor scorecard is the biggest threat and one of the dangerous pitfalls
D. Some companies do not know how to implement the effective drivers of performance
Answer» C. A poor scorecard is the biggest threat and one of the dangerous pitfalls
83.

Responsibility centers include

A. Adjustment centers
B. Call centers
C. Exam centers
D. Profit center
Answer» D. Profit center
84.

Responsibility reports for cost centers

A. Distinguish between fixed and variable costs
B. Use static budget data
C. Include both controllable and non-controllable costs
D. Include only controllable costs
Answer» D. Include only controllable costs
85.

Return on Investment may be improved by one of these

A. Increasing Turnover
B. increasing Expenses
C. decreasing Capital Utilization
D. over budgeting
Answer» A. Increasing Turnover
86.

ROI can be viewed as a function of the net profit margin times

A. Sales.
B. EAT.
C. The total asset turnover
D. Equity multiplier
Answer» C. The total asset turnover
87.

The Balanced Scorecard approach has been criticized for leaving out certain measures. One of these is:

A. Financial measures
B. Employee satisfaction measures
C. Customer satisfaction measures
D. Technological innovation measures
Answer» B. Employee satisfaction measures
88.

The drive in world markets to produce superior goods has led some countries to recognize or award prizes. What is the name of U.S. prize for developing quality products:

A. the Deming Prize
B. Malcolm Baldridge National Quality Award
C. the J.D. Power Award
D. the K.C. Irving Quality Award
Answer» B. Malcolm Baldridge National Quality Award
89.

The following are basic elements in which Continuous Improvement framework (leadership; planning; service orientation; information and analysis; employees and workplace climate; process management; excellence levels and trends

A. Six Sigma
B. Total Quality Management (TQM)
C. Zero Defect
D. Malcolm Baldridge Quality Award
Answer» D. Malcolm Baldridge Quality Award
90.

What is a measure of operating performance that indicates how successful the firm has been at increasing its MVA in a given year.

A. Economic value added (EVA)
B. After-tax cash flow (ATCF)
C. Earnings after taxes (EAT)
D. Market value added (MVA)
Answer» A. Economic value added (EVA)
91.

What is not included in a firm’s expenses?

A. Costs of goods sold
B. Depreciation
C. Interest expense
D. Dividends
Answer» D. Dividends
92.

What is the term used to describe the value assigned to the goods or services sold or rented from one unit of an organization to another

A. Variable cost
B. Fixed cost
C. Transfer price
D. Full service cost
Answer» C. Transfer price
93.

When managers of subunits throughout an organization strive to achieve the goals set by top management, the result is

A. Goal congruence
B. Planning and control
C. Responsibility accounting
D. Delegation of decision making
Answer» A. Goal congruence
94.

Which of the following statements about performance management systems is not true?

A. Performance management systems are ineffective
B. They encourage a short-term view among managers
C. Recommendations are prescriptive and suggest one best way
D. They improve organisational performance in the long-term
Answer» D. They improve organisational performance in the long-term
95.

Which transfer pricing method will preserve the subunit autonomy?

A. Variable-cost pricing
B. Negotiated pricing
C. Cost-based pricing
D. Full-cost pricing
Answer» B. Negotiated pricing
96.

Controllable costs, as used in a responsibility accounting system, consist of:

A. Only fixed costs.
B. Only direct materials and direct labor.
C. Those costs that a manager can influence in the time period under review.
D. Those costs about which a manager has some knowledge. Those costs that are influenced by parties external to the organization.
Answer» C. Those costs that a manager can influence in the time period under review.
97.

Evaluation of Capital Budgeting Proposals is based on Cash Flows because:

A. Cash Flows are easy to calculate
B. Cash Flows are suggested by SEBI
C. Cash is more important than profit
D. None of the above
Answer» C. Cash is more important than profit
98.

Sale of machine of machine merchandising business is –

A. Capital receipt
B. Capital income
C. Revenue income
D. Revenue receipt
Answer» D. Revenue receipt
99.

What do we call a formal comparison of the actual costs and benefits of a project with original estimates?

A. Post-completion audit
B. Feedback audit
C. Cost-benefit analysis
D. Business scorecard report
Answer» A. Post-completion audit
100.

Compliance with the Standard of Auditing is the responsibility of

A. Management
B. Those charged with governance
C. Auditor
D. Audit committee
Answer» C. Auditor
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