E5 Performance management

Written by Saad Rahman (ACCA)

ACCA · New at Expertise level · 8 questions

Name: ____________________   Date: ____________

1. Which type of indicator reports on past results?

   • A A budget
   • B A leading indicator
   • C A forecast
   • D A lagging indicator

2. Customer satisfaction scores that give early warning of future revenue are usually:

   • A Tax indicators
   • B Cost indicators
   • C Leading indicators
   • D Lagging indicators

3. What is short-termism?

   • A Reducing costs only
   • B Increasing sales only
   • C Planning for the future
   • D Putting short-term results ahead of long-term value

4. A division has an ROI of 20 percent and a cost of capital of 12 percent. A $500,000 project earns 16 percent. What does ROI suggest?

   • A Accept the project
   • B The project has no return
   • C Reject the project, because 16% is below the division's ROI of 20%
   • D The project is risk free

5. A division has an ROI of 20 percent and a cost of capital of 12 percent. A $500,000 project earns 16 percent. If the project is accepted, what is the annual change in residual income?

   • A $0
   • B $20,000
   • C $80,000
   • D $60,000

6. Which of the four Balanced Scorecard perspectives covers employee training and new products?

   • A Financial
   • B Customer
   • C Innovation and learning
   • D Internal business process

7. What is a challenge of the Balanced Scorecard?

   • A It uses only financial data
   • B It is too short
   • C It has no link to strategy
   • D Data overload and the choice of indicators

8. Which issue is specific to transfer pricing in multinational groups?

   • A Only one currency
   • B Tax rate differences and rules on arm's-length prices
   • C No tax authorities
   • D Prices are never agreed