Which of the following is an approach generally taken in the assessment of long term shareholder value?

1.   ?    Life of the firm’s fixed assets
2.   ?    Life of the firm’s fixed and variable assets
3.   ?    Life of the firm’s variable assets
4.   ?    Life of the firm’s tangible assets

Feedback control indicators:

1.   ?    Signal the results of decisions that have yet to be made
2.   ?    Signal the results of decisions that have already been taken
3.   ?    Predict what is going to happen
4.   ?    Predict what might happen

ROCE is calculated by:

1.   ?    Earnings before interest and tax (EBIT) / capital employed
2.   ?    Earnings before interest and tax (EBIT) / capital employed x 100
3.   ?    Earnings before interest and tax (EBIT) / residual income (RI)
4.   ?    Earnings before interest and tax (EBIT) / residual income (RI) x 100

Earnings before interest and tax – (invested capital x cost of capital) is the formula for:

1.   ?    Earnings before interest and tax (EBIT)
2.   ?    Return on capital employed (ROCE)
3.   ?    Residual income (RI)
4.   ?    Quick ratio

Adjusted profits after tax – (adjusted invested capital weighted average cost of capital) is the calculation for:

1.   ?    Value Added
2.   ?    Economic Value Added
3.   ?    Return on Value Added
4.   ?    Operational Value Added

Good ratio design is based upon:

1.   ?    Good, underlying data
2.   ?    Matching like variables
3.   ?    Sound accounting principles
4.   ?    Relating an input factor to an output factor

Short term decisions are those decisions that do not involve any major change in:

1.   ?    The fixed assets/costs of the enterprise
2.   ?    The fixed costs of the enterprise
3.   ?    The investment of the enterprise
4.   ?    The variable costs of the enterprise

Which of the following is not one of the purposes of an investment appraisal process?

1.   ?    To evaluate potential projects
2.   ?    To forecast results of potential projects
3.   ?    To qualify investment possibilities
4.   ?    To carry out a post-decision audit

Which of the following is an advantage of payback?

1.   ?    The method ignores receipts expected after the end of the payback period
2.   ?    The calculations are simple
3.   ?    No account is taken of the time value of money
4.   ?    Expected overall profitability is not considered

Cost Volume Profit analysis (CVP) is also known as:

1.   ?    Break point analysis
2.   ?    Profit potential analysis
3.   ?    Profit Earnings (PE) ratio
4.   ?    Break even analysis