1 A company's return on investment is computed by: A) dividing its margin by its turnover. B) dividing its turnover by its average operating assets. C) multiplying its margin by its turnover. D) multiplying its margin by its average operating assets
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| 1 |  | A company's return on investment is computed by: | ||
| [removed]A) | dividing its margin by its turnover. | ||
| [removed]B) | dividing its turnover by its average operating assets. | ||
| [removed]C) | multiplying its margin by its turnover. | ||
| [removed]D) | multiplying its margin by its average operating assets. | ||
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| 2 | | Which of the following is not considered an operating asset for purposes of calculating return on investment? | ||
| [removed]A) | Cash | ||
| [removed]B) | Common stock | ||
| [removed]C) | Inventory | ||
| [removed]D) | Plant equipment | ||
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| 3 | | Assuming that sales and net income remain the same, a company's return on investment will: | ||
| [removed]A) | increase if its operating assets increase. | ||
| [removed]B) | decrease if its operating assets decrease. | ||
| [removed]C) | decrease if its turnover decreases. | ||
| [removed]D) | decrease if its turnover increases. | ||
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| 4 | | The Midwest Division of Transformers, Inc. recorded operating data as follows for the past year:
| ||
| [removed]A) | 12.50%. | ||
| [removed]B) | 13.00%. | ||
| [removed]C) | 14.75%. | ||
| [removed]D) | 15.00%. | ||
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| 5 | | The Midwest Division of Transformers, Inc. recorded operating data as follows for the past year:
| ||
| [removed]A) | 2. | ||
| [removed]B) | 4. | ||
| [removed]C) | 10. | ||
| [removed]D) | 25. | ||
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| 6 | | The following data are available for the Eastern Division of Bradley, Inc. and the single product it makes:
| ||
| [removed]A) | 52,000 | ||
| [removed]B) | 65,000 | ||
| [removed]C) | 240,000 | ||
| [removed]D) | 1,300,000 | ||
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| 7 | | The Northwest Division of Huron Company recorded operating data as follows for the past year.
| ||
| [removed]A) | 11%. | ||
| [removed]B) | 12%. | ||
| [removed]C) | 13%. | ||
| [removed]D) | 14%. | ||
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| 8 | | The performance of the manager of a division is measured by residual income. Which of the following would increase the division manager's performance measure? | ||
| [removed]A) | A decrease in the division's average operating assets. | ||
| [removed]B) | A decrease in the division's net operating income. | ||
| [removed]C) | An increase in the division's average operating assets. | ||
| [removed]D) | An increase in the minimum required return. | ||
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| 9 | | Which of the following statements is not correct? | ||
| [removed]A) | Delivery cycle time is a key concern to many customers. | ||
| [removed]B) | Manufacturing cycle time is made up of wait time, process time, inspection time, move time, and queue time. | ||
| [removed]C) | Non-value-added activities include inspecting, moving, and queuing. | ||
| [removed]D) | Manufacturing cycle efficiency is computed by dividing value-added time by throughout time. | ||
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| 10 | | Which of the following statements is not correct? | ||
| [removed]A) | Financial measures such as ROI and residual income may be included in a balanced scorecard. | ||
| [removed]B) | Operating measures such as delivery cycle time may be included in a balanced scorecard. | ||
| [removed]C) | Top managers who translate strategy into performance measures that employees and understand and influence are following a balanced scorecard approach. | ||
| [removed]D) | Incentive compensation for employees, such as bonuses, should not be tied to balanced scorecard performance measures. | ||
12 years ago
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