Exam 25: Rewarding Business Performance

A common criticism of capital ROI as a performance measurement criterion is that it encourages a long-term orientation sometimes to the detriment of shorter-term planning.

Capital turnover is calculated by dividing operating income by average invested capital.

Residual income is the difference between net operating income at breakeven and actual net operating income.

Define the measurement model known as the DuPont system used for evaluating business performance.

The value chain starts with the supplier and ends with the consumer.

Morgan Company has a ROI of 5% and a capital turnover of 8%.What is its return on sales?

To increase return on sales,a manager could decrease cost of goods sold while increasing revenues.

Calculate and explain residual income and economic value added.

The main objective of the balanced scorecard system of performance measurement is achieving the organization's strategic goals.

Which of the following is not a strategy of the learning and growth lens of a balanced scorecard?

One of the strategies of the business process perspective lens of the balanced scorecard is to improve the quality of the manufacturing process.Which of the following is not one of the measures?

Return on investment indicates the profitability that can be expected from one dollar of sales.

The value chain consists of only those activities that increase the selling price of a product as it is distributed to a customer.