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SBL Finance, change and project management

ACCA · Strategic Professional · 8 questions

Name: ____________________   Date: ____________

  1. A project has an initial outlay of $100,000 at time 0 and a single inflow of $121,000 at the end of year 2. At a discount rate of 10 percent the NPV is:

    • A -$21,000
    • B $21,000
    • C $11,000
    • D $0

  2. The payback period of a project is:

    • A The profit as a percentage of investment
    • B The time taken to recover the initial investment from cash flows
    • C The total cash inflow
    • D The discount rate that gives zero NPV

  3. Lewin's model of change has three stages. In order they are:

    • A Resist, accept, commit
    • B Analyse, design, implement
    • C Plan, do, review
    • D Unfreeze, change, refreeze

  4. Which of these is a common reason for resistance to change?

    • A Clear communication
    • B Fear of loss of status or job security
    • C Involvement in the design
    • D Training

  5. A project that is on schedule but is over budget and does not meet quality requirements has failed which aspects of the project triangle?

    • A Time only
    • B None
    • C Cost and quality
    • D Scope only

  6. A balanced scorecard includes which perspectives?

    • A Planning, control, review and audit
    • B Profit, loss, cash and assets
    • C Income, cost, revenue and margin
    • D Financial, customer, internal process, and learning and growth

  7. Return on capital employed is calculated as:

    • A Profit before interest and tax divided by capital employed
    • B Net assets divided by profit
    • C Profit after tax divided by revenue
    • D Revenue divided by capital

  8. A post-completion review of a project is mainly used to:

    • A Compare results with the plan and learn lessons
    • B Set the transfer price
    • C Approve the budget for the next year
    • D Calculate depreciation

Answer key

1. D, 2. B, 3. D, 4. B, 5. C, 6. D, 7. A, 8. A

  1. The present value of 121,000 at 10 percent for two years is 121,000 / 1.21 = 100,000, so the NPV is zero.

  2. Payback ignores cash flows after the payback date and the time value of money in its simple form.

  3. Lewin's model describes preparing for change, making the change and then embedding it.

  4. People resist when they feel threatened or uninformed. Participation and communication reduce resistance.

  5. The project management triangle balances time, cost and quality (or scope).

  6. These are the four perspectives of the balanced scorecard of Kaplan and Norton.

  7. ROCE uses operating profit as a percentage of the capital invested in the business.

  8. Reviews assess whether benefits were achieved and improve future appraisals.