Modern Education Society’s

Neville Wadia Institute of Management Studies and Research, Pune - 411001

MBA-II SEM-IV
Enterprise Performance Management MCQs
Question A B C D ANSWER
Capital Budgeting Decisions are: Reversible Irreversible for short term involves small B
amount
Which of the following is not incorporated Tax-Effect Time Value of Required Rate of Rate of Cash D
in Capital Budgeting? Money Return Discount
PERT / CPM have to be used for proper planning controlling staffing coordinating B
……………….. of all projects
BSC is important for ……… creating strategy controlling strategy evaluating the mapping strategy C
performance of a
strategy
Classification of responsibility center is Inputs and/or outputs Inputs and outputs Inputs only Outputs only A
based on the nature of the monetary
……………
Discretionary expenses are expenses that do not create that do not hamper that are completely that are necessary B
……… value the operations unnecessary
immediately
For the board of directors of the Profit center Expense center Responsibility Investment center C
company, the entire company is a center
……………….
In a revenue center the primary Output in physical Input in cost terms Revenue Cost incurred by C
measurement is …………………. terms center
In case of discretionary expense center, Implementation Quality control Output Planning D
the financial center is primarily exercised
at ………. Stage.
In case of revenue center the output is Physical, quantity and Monetary, Monetary, input and Monetary, output only C
measured in ……………. terms, but no quality efficiency and output
formal attempt is made to relate effectiveness
……………….
In financial performance measurement EVA ROI Profit Margin MVA A
most important is ……………
Performance management is ……………. Strategic tool Re-engineering Business process Strategic C
tool management tool
Profit centre profit is calculated …….... before debiting after debiting without considering along with corporate B
Corporate overheads corporate corporate overhead
overheads overheads

A major part of strategy implementation is Planning Communication Resource allocation Monitoring C

…….
The Enterprise Performance Management Financial Planning Operational Business Analytics Consolidation and C
core processes does not include which of Planning Reporting
the following?
The Malcolm Baldrige Award is awarded Japan Russia U.K. U.S.A. D
by the Government of ……….
The responsibility center whose inputs Revenue center Expense center Profit center Investment center B
are measured in monetary terms, but
whose output is not, is ………………..
Two step transfer prices depend on ROI requirement profit requirement corporate profit SBU profit C
………………. requirement requirement
Which of the following does not belong to Number of Proportion of Levels of Amount of C
the category of quantitative performance
indicators?
Which of the following is correct? ROI = Income / Asset Revenue / Asset Cost / Revenue Profit / No. of shares A
employed employed outstanding
Which of the following is not a financial Opening cash flow Return on assets Market Cap Market share/growth D
performance measure?
Which of the following is not an entity Team Focus Customer Focus Operations Focus Work Force Focus A
with reference to Baldrige Criteria /
Framework?
The selective and analytical approach to ABC Analysis Gross Margin Multiple Attribute Sell Through Analysis A
control investment in various types of Return on Method
inventories is known as Investment
…………………………… (GMROI)
The Sell Through Analysis is not about Sales Inventory/ Sales Sales Velocity Merchandise A
……………………… Turn Over Management
The Non-profit Organization focus more Social Surplus generation Funds mobilization Governance A
on ……….. welfare/interests
The time the activity would take if things Pessimistic time Most likely time Optimistic time Average time A
did not go well is known as
_______________
Which of the following is responsible for Management Auditors Management and Committee of A
establishing a private company’s internal auditors Sponsoring
control? Organizations
A responsibility center in which the Cost center Revenue center Profit center Investment center D
manager is held accountable for the
profitable use of assets and capital is
commonly known as a(n)
In the balanced scorecard approach The internal The customer The financial The innovation and A
quality would come under which perspective perspective perspective learning perspective
perspective?
Performance management is believed to Japan France Denmark USA D
have originated from which country?
The overall purpose of the balanced Help turn strategy into Benchmark against Measure financial Measure product A
scorecard approach is to: action competitors performance quality
The process of evaluating an employee’s recruitment employee selection performance organizational C
current and/or past performance relative appraisal development
to his or her performance standards is
called
The term 'EVA' is used for: Extra Value Analysis Economic Value Expected Value Engineering Value B
Added Analysis Analysis
The U.S. National Quality Award is named Joseph Juran Genichi Taguchi W. Edwards Malcolm Baldrige D
after Deming
Which of the following statements is Are one type of Can be cascaded to Cannot be used in Can be used to C
false? Balanced scorecards performance different conjunction with produce strategy
dashboard levels/parts of budgetary control maps
organisations systems
Which of the following statements They are hard to They do little to They are not They are useful in D
regarding flaws suffered by financial quantify motivate effective in getting identifying
measures is not correct:
employees to managers' operational problems
improve attention
accounting profits
Which of the following variable does ROI EBIT EVA ROI DuPont chart B
examine?
A sound Capital Budgeting technique is Cash Flows Accounting Profit Interest Rate on Last Dividend Paid A
based on: Borrowings
Capital Budgeting deals with: Long-term Decisions, Short-term Both (a) and (b) Neither a) nor (b) A
Decisions
Capital Budgeting Decisions are based Incremental Profit Incremental Cash Incremental Assets, Incremental Capital. B
on: Flows
Capital Budgeting is a part of: Investment Decision Working Capital Marketing Capital Structure A
Management Management
Which of the following is not applied in Cash flows be All costs and All accrued costs All benefits are C
capital budgeting? calculated in benefits are and revenues be measured on after-tax
incremental terms measured on cash incorporated basis
basis
Which of the following is not followed in Cash flows Principle Interest Exclusion Accrual Principle Post-tax Principle C
capital budgeting? Principle
Which of the following is not true for Sunk costs are Opportunity costs Incremental cash Relevant cash flows B
capital budgeting? ignored are excluded flows are are considered
considered
Which of the following is not used in Time Value of Money Sensitivity Analysis Net Assets Method Cash Flows B
Capital Budgeting?
Which one is the Capital Expenditure? Capital invested by the Selling expense for Machine purchased Daily expenses to C
owner machine operate business
Who among the following have the Directors Members Officer of Sebi Both (a) and (c) D
authority to inspect the books of
accounts?
Under responsibility accounting, the Directly controls Directly and Indirectly controls Has shared A
evaluation of a manager’s performance is indirectly controls responsibility for with
based on matters that the manager: another manager
Return on Assets and Return on Liquidity Ratios Profitability Ratios Solvency Ratios Turnover B
Investment Ratios belong to:
………….. costs are not easily changed Committed Discretionary Engineered Marginal A
and are often fixed, for ex, once a
company has decided to rent a place.
Management by objective is the process Top management sets Budgeteer A manager decides Budget is not B
in which objectives for the sub- proposes to his own area of prepared at all.
ordinate managers accomplish specific operations and
jobs and prepares prepares budget for
budget for it. it.

Return on Assets (ROA) ratio is given by Net Income/ Sales Sales / Total Net Income/ Total Gross Margin/ Net C
which of the following? Assets Assets Sales
The Strategic Business Unit evolved 1970s & 1980s 1990s 1960s 21st Century A
during the ………………………
The strategic Business Unit evolved from Hierarchy- based Function based Territorial structure Divisional structure of D
………………… structure of structure of of organization organization
organization organization
There are four elements of Anthony’s Detector Assessor Effecter Rejecter D
model. Which one does not belong to the
group?
Total control over discretionary expense Financial Non-financial Objective based Output based B
center is achieved primarily through
……… performance measures.
Which of the following areas is not Education Health Care Small Business Multi National D
covered under the Baldrige Award? Corporation (MNC)
Which of the following is an example of Market share Net profit Gross margin ROI A
lead indication?
If project A has a lower payback period Lower NPV and be Higher NPV and be Higher NPV and be Lower NPV and be C
than project B, this may indicate that less profitable less profitable more profitable more profitable
project A may have a …………….
The primary capital budgeting method Net present value Cash payback Annual rate of Profitability index A
that uses discounted cash flow method technique return method method
techniques is the ……....
Which of the following ignores the time Internal rate of return Profitability Index Net present value Cash payback D
value of money?
Which of the following is not true? Asset Non-current liabilities Total assets – Non-current assets Shareholder’s equity D
employed is equal to + shareholder’s equity current liabilities + working capital –current liabilities

As asset becomes Non Performing after 180 days 60 days 90 days 91 days C
default of ……………………
As per the RBI guidelines banks have to 20% 40% 50% 45% B
make sure that out of their loan assets
___________ loans are given to Priority
Sector.
The capital adequacy ratio to be 8% 10% 10.5% 12% D
maintained by public sector banks in
India is ……………....
The Retailer is selling the merchandise for Higher than 1 Equal to 1 Less than 1 Equal to 3.2 A
more than it costs the Retailer to acquire
it, then the GMROI Ratio would be
……………………
Which of the following do not fall under Nationalization of Public Sector Zero Balance Education at D
Financial inclusion ? Banks Lending targets Accounts affordable cost
While calculating the Gross Margin Ratio Stock on Hand and Gross Margin and Gross Revenue and Carrying Costs and B
on Investment (GMROI), the TWO Stock-Outs incidents Average Inventory Stock on Hand Stock-Out Costs
important aspects are: Cost
Assembling project team and assigning Project Planning Project Initiation Project Controlling Project Execution B
their responsibilities are done during
which phase of project management?
PERT is the Time oriented Event oriented Activity oriented Target oriented B
technique technique technique technique
Which of the following is not one of the Comprehensive Comparative Multi-directional Non-Participatory D
eight specific principles of Social Audit?
Which of the following statement about The NPOs generally The NPOs receive The sources of The NPOs are D
NPOs is not true? tend to be service ‘Contributed funds for NPOs are subjected to Market
organisations Capital’ and have more or less Mechanism
no shareholders captive
Which is not a primary objective of audit? Detection and Examining the Verifying the Confirming the A
Prevention of Errors System of internal authenticity and existence and value
check validity of of assets and
transactions liabilities
Which of the following area is not covered System and Board’s / Directors Research and New product D
by management audit? Procedures Analysis development development cycle
time
Which of the following area is specially Economic Contribution Cost-Benefit Social Cost-Benefit Sensitivity Analysis A
covered by Management Audit? Analysis Analysis Analysis
Assuming that it is not the first The Shareholders in a The Managing The board of The audit committee A
appointment of the auditor, who is general meeting director directors in board
responsible for the appointment of the meeting
auditor?
A Balanced Scorecard helps the Be ready and Be focus on all the Integrate strategy Communicate better B
organisation to: prepared to implement relevant business and key challenges with staff
an ERP perspectives
A cost center manager Does not have the May be involved Would normally be Often oversees A
ability to produce with the sale of held accountable divisional operations
revenue new marketing for producing an
programs to adequate return on
clients. invested capital.

According to DuPont analysis, increase in Increase both ROE Increase ROE but Increase ROA but Increase neither ROA A
the profit margin (all else constant) and ROA not ROA not ROE nor ROE
should
DU PONT Analysis deals with Analysis of Current Analysis of Profit Capital Budgeting Analysis of Fixed B
Assets Assets
If return on investment is a measure used Financial perspective Customer Learning and Internal business A
on the balanced scorecard, under which perspective growth perspective perspective
perspective would it be listed
Pitfalls exists the same as with any new Some companies use Some companies A poor scorecard is Some companies do C
technology or management tool. All of the too few measures in include too many the biggest threat not know how to
following describe these pitfalls except
their score measures and one of the implement the
dangerous pitfalls effective drivers of
performance
Responsibility centers include Adjustment centers Call centers Exam centers Profit center D
Responsibility reports for cost centers Distinguish between Use static budget Include both Include only D
fixed and variable data controllable and controllable costs
costs non-controllable
costs
Return on Assets and Return on Liquidity Ratios Profitability Ratios Solvency Ratios Turnover B
Investment Ratios belong to:
Return on Investment may be improved by Increasing Turnover increasing decreasing Capital over budgeting A
one of these Expenses Utilization
ROI can be viewed as a function of the net Sales. EAT. The total asset Equity multiplier C
profit margin times turnover
The Balanced Scorecard approach has Financial measures Employee Customer Technological B
been criticized for leaving out certain satisfaction satisfaction innovation measures
measures. One of these is: measures measures
The drive in world markets to produce the Deming Prize Malcolm Baldridge the J.D. Power the K.C. Irving Quality B
superior goods has led some countries to National Quality Award Award
recognize or award prizes. What is the
Award
name of U.S. prize for developing quality
products:
The following are basic elements in which Six Sigma Total Quality Zero Defect Malcolm Baldridge D
Continuous Improvement framework Management Quality Award
(leadership; planning; service orientation;
(TQM)
information and analysis; employees and
workplace climate; process management;
excellence levels and trends
What is a measure of operating Economic value added After-tax cash flow Earnings after taxes Market value added A
performance that indicates how (EVA) (ATCF) (EAT) (MVA)
successful the firm has been at
increasing its MVA in a given year.
What is not included in a firm’s Costs of goods sold Depreciation Interest expense Dividends D
expenses?
What is the term used to describe the Variable cost Fixed cost Transfer price Full service cost C
value assigned to the goods or services
sold or rented from one unit of an
organization to another
When managers of subunits throughout Goal congruence Planning and Responsibility Delegation of A
an organization strive to achieve the control accounting decision making
goals set by top management, the result
is
Which of the following statements about Performance They encourage a Recommendations They improve D
performance management systems management systems short-term view are prescriptive and organisational
is not true? are ineffective among managers suggest one best performance in the
way long-term
Which transfer pricing method will Variable-cost pricing Negotiated pricing Cost-based pricing Full-cost pricing B
preserve the subunit autonomy?
Controllable costs, as used in a Only fixed costs. Only direct Those costs that a Those costs about C
responsibility accounting system, consist materials and manager can which a manager has
of: direct labor. influence in the time some knowledge.
period under Those costs that are
review. influenced by parties
external to the
organization.

Evaluation of Capital Budgeting Cash Flows are easy Cash Flows are Cash is more None of the above C
Proposals is based on Cash Flows to calculate suggested by SEBI important than profit
because:
Sale of machine of machine Capital receipt Capital income Revenue income Revenue receipt D
merchandising business is –
What do we call a formal comparison of Post-completion audit Feedback audit Cost-benefit Business scorecard A
the actual costs and benefits of a project analysis report
with original estimates?
Compliance with the Standard of Auditing Management Those charged Auditor Audit committee C
is the responsibility of with governance
Cost Audit is comprised in which of the Verification, Review, Planning, Review, Review, Planning, Conducting, C
following steps? Reporting Reporting Verification, Reporting
Reporting
The financial statements of the company Chief executive Chief financial Chairperson only if Statutory Body C
shall be authenticated by officers even he is not officer only if he is he is authorized by
the director director. the board.
The ________ compares the dollar return EBIT EVA ROI DuPont Chart B
generated by the firm to the return
expected by the investors of the capital
invested by them in the firm.
Which one of the following is a ‘lag’ Number of training Return on capital Number of Output per employee B
performance indicator hours per employee employed complaints received
from customers

Economic Value Addition was developed Stern & Stewart Peter Drucker Koontz & O'Donnel Anthony & A
by ______________ Govindrajan
The Tata Group of Industries have Porter Prize for Jamsetji Tata Tata Business Annual Awards of C
modified and internalised the Baldridge Excellence Award Excellence Model Business Excellence
Criteria and is known as the (TBEM) (AABE)
________________________
Which of the following pair about Control to Decontrol Competition to Production to Volume to Profit B
Paradigm Shifts in the contemporary Opening Up Marketing
Business Environment is incorrect?
Intangible benefits in capital budgeting Product quality Employee loyalty Salvage value Product safety C
would include all of the following except
increased …..…..
Which of the following is not typical cash Increase operating Overhaul of Salvage value of Depreciation expense D
flow related to equipment purchase and costs equipment equipment when
replacement decision? project is complete

As per the RBI Internationals Banks have 8% 9% 12% 10% B

to maintain a Capital Adequacy Ratio of
_______________
Which of the following is not a part of Standard Assets Earning Assets Loss Assets Doubtful Assets B
loan assets classification
Earliest finish time can be regarded as Earliest start time + Earliest start time Latest finish time + Latest finish time A
duration of activity duration of activity duration of activity duration of activity

The first use of the term “Social Audit” is Peter Drucker George Coyder Charles Medawar Amartya Sen B
generally attributed to ………………
The stipulations as regards maintenance The Societies The Public Trust The Companies Act The Indian Trust Act D
of accounts of / by NGOs / NPOs are Registration Act Act
stipulated by which of the following?
PERT is based on the assumption that an Binomial Distribution Probability Uniform Distribution Exponential B
activity's duration follows Distribution Distribution
_________________
____________________ of the Companies Section 148 Section 138 Section 142 Section 146 B
Act, 2013 provides that the Internal
Auditor shall be a Chartered Accountant
or a Cost Accountant or any other
professional as may be decided by the
Board of Directors.
Cost Audit is applicable in case of the Section 148 Section 138 Section 142 Section 146 A
companies falling under certain specific
categories of industries and for those
companies who have been asked by the
central government to maintain the cost
accounting records and get these cost
accounting records audited as per the
provisions of _________________ of the
Companies Act, 2013
Section 139 provides that the first auditor 60 30 120 45 B
of the company shall be appointed by
Board of Directors of the company within
____________ days
International auditing standards are International Financial International Audit Auditing Practices C
issued by the: Accounting Standard Accounting Audit and Assurance Board
Board Board Standards Board
In a responsibility report for a profit center, Profit center margin Controllable Net income Income from B
controllable fixed costs are deducted from margin operations
contribution margin to show:
Internal Perspective is part of the Regulatory and Customer solutions Strategic Revenue Growth A
Complete Balanced Scorecard Strategy. Society Theme Technologies Strategy
This is a correct sub item for this
perspective
Learning & Growth Perspective: role for Improve shareholder Low total cost Operations theme Strategic D
intangible assets -- people, systems, value technologies
climate and culture is part of the BSC
Strategy. Identify which of the following is
a sub item of Learning & Growth
Perspective
Which of the following would have a low A maintenance The billing The mayor's office Both "C" and "D" D
likelihood of being organized as a profit department that department of an in a large city above.
center? charges users for its Internet Services
services Provider (ISP).
Which one of the following is a ‘lag’ Number of training Return on capital Number of Output per employee B
performance indicator hours per employee employed complaints
received from
customers
Cash Inflows from a project include Tax Shield of After-tax Operating Raising of Funds Both (a) and (b). C
Depreciation Profits
If capital expense is recorded as revenue Bank balance Debtors Creditors Net profit D
expense then which calculation will be
wrong?
In Capital Budgeting, Sunk cost is Of Small Amount Not Incremental Not Reversible Reversible B
excluded because it is
Which of the following is not a capital Expansion Merger Replacement of an Inventory Level D
budgeting decision? Programme Asset