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TitleEpm Questions
TagsStrategic Management Inventory Retail Profit (Accounting) Nonprofit Organization
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Page 1

EPM-Multiple Choice Questions

1. All Responsibility Centres are structured as Profit Centres. True/False.

2. Responsibility Centres are created for 

(a) decentralisation of functions

(b) to relieve top management of day to day activities

(c) for better control

(d) all of the above

3. The right way of calculating EVA is 


(b) NOPAT + Depreciation − Interest

(c) NOPAT + Interest − WACC

4. Discretionary expenses are expenses 

(a) those expenses that do not create value

(b) they do not hamper the operations immediately

(c) they are completely unnecessary

5. Revenue Centres Managers are good if they 

(a) spend the budget fully but do not meet revenue targets

(b) they spend more than budget but also meet their revenue target

(c) they spend within the budget but over achieve their revenue target

6. Profit Centre’s profit is calculated 

(a) before debiting Corporate overheads

(b) after debiting corporate overheads

(c) without considering corporate overheads

7. Higher EVA will lead to higher MVA. True/False

1. The four perspectives of BSC are interrelated but financial performance is the most

important one. (true/False)

2. BSC is important for

(a) Creating strategy

(b) Controlling strategy

(c) Evaluating the performance of a strategy.

3. Hours spent with customers should be for:

(a) To get payments

(b) To assess future requirements.

(c) To inform about new innovations made by the company.

4. In financial performance measurement most important these days is:

(a) EVA

(b) ROI

(c) Profit margin

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(a) Borrower.

(b) Bank

(c) Both.

6. An asset becomes Non Performing

(a) After default of 180 days

(b) After default of 60 days

(c) After default of 90 days.

1. A project may face following risks:

(a) Completion risk

(b) Financial risk

(c) Technology Risk

(d) All of the above.

2. PERT/CPM have to be used for proper control of all projects. (True/False)

3. All Projects are unique in nature. (True/False)

4. Arrange in the order of priories.

(a) Financial

(b) Idea

(c) Manpower

(d) Location



1. Which of the following pair about Paradigm Shifts in the contemporary Business Environment

is incorrect?

a) Control to Decontrol b) Competition to Opening Up

c) Production to Marketing d) Volume to Profit

2. Which of the following pair of changes in the Organisational Changes in the 20

Century and


Century is incorrect?

a) Goal-directed to Vision-directed b)Bureaucratic to Entrepreneurial

c) Compliance to Commitment d) Efficient to Stable

3. Today’s organisations are not changing internally as regards____________

a) Structure b)Systems

c) Culture d) Leadership in Market

4. The Six Essential Dimensions of Performance does not include which of the following?

a) Innovation b) Re-Engineering

c) Speeed d) Quality

5. Today’s Market Place is described as “Competitive Battlefield” by ______________

a) C.K.Prahlad b) Michael Porter

c)Peter Drucker d) Philip Kotler

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6. Performance Management is ______________

a) Strategic Tool b) Re-Engineering Tool

c) Business Process d) Strategic Management Tool

7. The Enterprise Performance Management core processes does not include which of the


a) Financial Planning b) Operational Planning

c) Business Analytics d) Consolidation and Reporting

8.Entrprise Performance Management should not be seen as a ___________ .

a) Corrective Action b) Post-Mortem

c) Critical Success Factor d) Key Performance Indicator.

9.Which of the following is not one of the methodologies used for ensuring effective Enterprise

Performance Management?

a) Six Sigma b) Activity Based Costing

c) Total Quality Management d) Control by Exception

10) Which of the following is not one of the four types of Performance Indicators?

a) Quantitative Indicators b) Qualitative Indicators

c)Laggard Indicators d) Lead Indicators.

11. The SAVI Indicators does not include which of the following?

a)Speed Indicators b) Accuracy Indicators

c) Velocity Indicators d) Investment Indicators



1. Responsibility Accounting ________________ accounting and financial reporting with

management and lines of authority and responsibility.

a) provides b) integrates

c) separates d) diagnoses

2. Which of the following is not one of the steps for installing Responsibility Accounting System?

a) Create a set of financial performance goals

b) Measure and report actual performance goals

c) Evaluate based on comparison of Actuals with Budgets

d) Initiate corrective actions.

3. Which of the following is not one of the three types of Responsibility Accounting Systems?

a) Process-based Responsibility Accounting System.

b) Functional-Based Responsibility Accounting System.

c) Activity-based Responsibility Accounting System.

d) Strategic-based Responsibility Accounting System.

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4. Return on Assets (ROA) Ratio is given by which of the following?

a) Net Income / Sales b) Sales / Total Assets

c) Net Income / Total Assets d) Gross Margin / Net Sales

5. Which of the following is not a component of Market Value Added (MVA) ?

a) Invested Capital b) Current Operations Value (COV)

c) Future Growth Value (FGV) d) Net Present Value (NPV)


1. Many experts have questioned the extensive, and at times exclusive, use of Financial

Measurements to assess the performance of a business organisation/enterprise.


2. The Financial Performance Evaluation Parameters only give ____________ .

a) “Position as at” b) “Competitive Position”

c) “Position as regards Six Sigma” d) “Position in Market”.

3. Which of the following is not a Non-Financial Performance Evaluation Parameter?

a) Productivity b) Quality Rejection

c) Cost To Company d) Market Share


1. The Malcolm Baldrige Award is awarded by the Government of __________________.

a) Japan b) Russia

c) U.K. d) U.S.A

2. Which of the following areas is not covered under the Baldrige Award?

a) Education b) Health Care

c) Small Business d) Multi National Corporation (MNC)

3. Which of the following is not one of the criterion for the Baldrige Award?

a) A set of expectations or requirements.

b) Application of ISO 2000-2003 Guidelines.

c) A Structured approach to Performance Management.

d) A Framework for a Systems View of Performance Management.

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4. Which of the following is the “odd man out” entity with reference to the Baldrige Criteria /


a) Team Focus b) ) Customer Focus

c) Operations Focus d) ) Work Force Focus

5. Given below are the Point Values allotted to various Baldrige Criteria. Which of them is incorrect?

a) Opertaions Focus (85) b) Customer Focus (85)

c) Leadership (100) d) Results (450)


1. The Strategic Business Unit (SBU) evolved from ________________ .

a) Hierarchy-based structure of organisation

b) Function-based structure of organisation

c) Territorial structure of organisation

d) Divisional structure of organisation

2. The Strategic Business Unit (SBU) evolved during the ________________ .

a) 1970s & 1980s b) 1990s

c) 1960s d) 21


3. Which of the following statement about the Strategic Business Unit (SBU) is TRUE?

a) SBUs are not tightly controlled.

b) SBUs are not separate business set-up.

c) SBUs are held responsible for their own Results / Performance.

d) SBUs are evolved from Matrix Structure.

4. A Strategic Business Unit is a _____________ .

a) Cost Centre b) Revenue Centre

c) Profit Centre d) Investment Centre

5. Which of the following is not a Financial Performance Measure?

a) Opening Cash Flow b) Return on Assets (ROA)

c) Market Cap d) Market Share / Growth

6. Find the odd statement out:

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a) The Strategic Business Units (SBUs) are the “Natural Groupings” of part of a Corporation.

b) The Strategic Business Unit’s (SBU’s) strategy is the same as the Corporate Strategy.

c) The Strategic Business Units (SBUs) have an external Market Focus.

d) The Strategic Business Units (SBUs) allow Corporates to respond quickly to changes taking place.

7. Which of the following is not a Customer-related Performance Measure?

a) Market Share b) Customer Volume

c) Customer Satisfaction d) New Customers

8. Which of the following pair is incorrect?

a) Service Performance Measure: Service Quality

b) Human Resource Performance Measure: Productivity

c) Shareholder Performance Measure: Market Value Added (MVA)

d) Production Performance Measure: Product Life Cycle.


1. “A projected state of affairs that a person, a system or an organisation, plans or intends to achieve

is __________________ ” .

a) Strategy b) Mission

c) Vision d) Goal

2. “A process where the actions people are led to take in accordance with their perceived self-

interest are also in the best interest of the organisation” is known as ___________________.

a) Synergy b) Synchronisation

c) Congruence d) Integration.


1. Which of the following is not one of the typical functions performed by the Retailers?

a) Breaking Bulk b) Holding Inventory

c) Providing Service d) Providing Single Product / Service.

2. The selective and analytical approach to control investment in various types of inventories is

known as ______________________ .

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a) ABC Analysis b) Gross Margin Return on Investment(GMROI)

c) Multiple Attribute Method d) Sell Through Analysis

3. Which of the following is not one of the steps involved in implementation of ABC Analysis?

a) Classify Inventory Items based on expected use in units

b) Rank the items in accordance with total value of each item

c) Determining the Annual Consumption Value

d) Combine items on the basis of their relative value to form the ABC Categories.

4. The Sell Through Analysis is not about _______________________ .

a) Sales b) Inventory / Sales Turn Over

c) Sales Velocity d) Merchandise Management.

5. Poor Sales or Too Much Inventory is indicated by Sell Through Ratio which is _______________ .

a) High b) Medium

c) Low d) Exponential.

6. While calculating the Gross Margin Ratio on Investment (GMROI), the TWO important aspects are:

a) Stock on Hand & Stock-Outs incidents b) Gross Margin & Average Inventory Cost.

c) Gross Revenue & Stock on Hand d) Carrying Costs & Stock-Out Costs

7. The Retailer is selling the merchandise for more than it costs the Retailer to acquire it, then the

GMROI Ratio would be ___________________ .

a) Higher than 1 b) Equal to 1

c) Less than 1. d) 3.2

8. The Elementary Methods, The MAUT Methods and the Out-Ranking Methods refer to the

technique of _____________________ .

a) Inventory Classification Method b) Sell Through Analysis

c) MAL d) GMROI Analysis.


1. The Non-Profit Organisation focus more on ________________.

a) Social Welfare / Interests b) Surplus Generation

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