1Which one of the following statements about the 'balanced scorecard' is correct?

Select one:

A.It is used only by aeroplane manufacturers.

B.It is an interesting theoretical idea that has never taken off in practice.

C.It has been widely adopted in leading US and European companies.

D.It is unhelpful because it involves too many separate reports.

2Which one of the following isNOTa key perspective of the balanced scorecard?

Select one:

A.Internal business perspective

B.Financial perspective

C.Investment perspective

D.Customer perspective

3Which one of the following statements isNOTcorrect?

Select one:

A.The balanced scorecard includes only non-financial measures of performance.

B.The balanced scorecard is based on the assumption that successful innovation drives customer acquisition, loyalty and growth that, in turn, leads to enhanced operating margins.

C.Key performance indicators (KPIs) are used in the balanced scorecard.

D.The continuous process of measuring a company's own products, services and activities against competitors' performance is known as bench marking.

4Return on investment (ROI) is calculated using which of the followingformulae?

Select one:

A.Divisional net profit / Divisional investment in net assets.

B.Divisional net profit / Divisional investment in listed securities.

C.Divisional net profit / Divisional investment in total assets.

D.Divisional net profit before depreciation / Divisional investment in net assets.

5Residual income (RI) is calculated as:

Select one:

A.Divisional net profit less (cost of capital x divisional net profit).

B.Divisional net profit less (cost of capital x investment in net assets).

C.Divisional net profit less (ROI x divisional net profit).

D.Divisional net profit less (ROI x investment in net assets).

Information text:

The manager of Broome division is considering a new investment. The following estimates have been prepared:

Broome Division

Cost of capital of the company

13%

Annual profit (before interest)

28,000

Investment

200,000

Annual sales

100,000

Current return on investment

9%

6Which of the following statements isNOTcorrect?

Select one:

A.The manager will want to accept the project if divisional performance is measured using return on capital employed.

B.The manager will want to accept the project if divisional performance is measured using residual income.

C.Head office will want the manager to accept the project.

D.The manager will want to reject the project if divisional performance is measured on return on capital employed.

7K Division has reported a profit of 57,000 on sales of 287,000.Its net assets amounted to 389,000 and its cost of capital is 14%. The division's target ROI is 20%.

K division's return on investment (ROI) is:

Select one:

A.14.00%

B.14.65%

C.20.00%

D.19.86%

8B division has net assets of 1,200,000 and has made net profit before interest of 240,000 for the year. The company's cost of capital is 12%.

B division's residual income (RI) is:

Select one:

A.144,000

B.960,000

C.96,000

D.211,200

9Which one of the following statements about non-financial performance measures isNOTcorrect?

Select one:

A.Non-financial measures do not involve the calculation or recording of any numbers.

B.The most appropriate non-financial measures vary, depending upon the nature of the organisation.

C.Non-financial measures should correspond as far as possible with the aims of the organisation as a whole.

D.The use of non-financial performance measures helps to address the deficiencies of measures such as Return on Investment (ROI).

10A division has net assets of 200,000. Its residual income is 36,000 based on a cost of capital of 12%. The division's ROI is:

Select one:

A.18%

B.12%

C.30%

D.6%