BMGT 221 cid 9 Exam Simulation Chapter 11 SECTION MULTIPLE CHOICE Choose the one alternative that best completes the statement or answers the question 1 Which of the following is a potential advantage of decentralization cid 9 1 cid 9 A Provides training B Promotes goal congruence and coordination C Provides feedback D Benchmarking 2 The central reservation office at American Airlines is most likely treated as a n cid 9 A cost center cid 9 C profit center cid 9 B investment center jrevenue center 3 Performance evaluation systems have all of the following goals EXCEPT cid 9 VMV assuring profit goals are achieved B promoting goal congruence between subunits C motivating unit managers D communicating goals throughout the organization 2 cid 9 2 3 cid 9 A 4 Which of the following goals of a performance evaluation system is accomplished when cid 9 4 bonuses are provided to subunit managers who achieve performance targets A Communicating expectations C Benchmarking B Promoting goal congruence Motivating unit managers 5 The number of on time deliveries would be an example of measuring which perspective cid 9 5 8 A Financial C Internal business Customer D Learning and growth 6 Employee satisfaction would be an example of measuring which perspective A Financial C Internal business B Customer Learning and growth 1 cid 9 cid 9 cid 9 cid 9 cid 9 cid 9 cid 9 7 Chardon had the following financial results for cid 9 do these financial results reflect center cid 9 7 cid 9 A Flexible Budget Flexible Budget Variance U or F of Variance U or F 220 000 200 000 70 000 80 000 20 000 F 10 000 U 10 00 F 14 29 U 140 000 40 000 100 000 130 000 40 000 90 0001 10 000 F 0 10 000 F 7 69 F 0 11 11 F One store Actual Revenues Operating Expenses Income from operations before service dept charges Service department charges Income from operations Profit center cid 9 C Revenue center cid 9 B Investment center cid 9 D Cost cid 9 kA 1 Y cid 9 O cid 9 e4 v cid 9 Q4 1 tAt4 8 Assume the Cell Phone Division of the First Electronics Corporation had the following results 8 cid 9 D last year in thousands Management s target rate of return is 10 and the weighted average cost of capital is 7 Its effective tax rate is 30 Sales Operating income Total assets Current liabilities What is the division s capital turnover 6 000 000 900 000 3 000 000 750 000 41 ffHfl A 3 3 C 6 7 D 4 0 9 Assume the Cell Phone Division of the First Electronics Corporation had the following results 9 cid 9 I last year in thousands Management s target rate of return is 10 and the weighted average cost of capital is 7 Its effective tax rate is 30 Sales Operating income Total assets Current liabilities 6 000 000 900 000 3 000 000 750 000 What is the division s Residual Income RI 600 000 cid 9 B 300 000 cid 9 C 472 500 cid 9 D 690 000 o r ric cid 9 b c ctoo bOO 1970 cid 9 2 q00 000 1 0 000 cid 9 cid 9 cid 9 cid 9 10 Assume the Cell Phone Division of the First Electronics Corporation had the following results last year in thousands Management s target rate of return is 10 and the weighted average cost of capital is 7 Its effective tax rate is 30 10 Sales Operating income Total assets Current liabilities 6 000 000 900 000 3 000 000 750 000 What is the division s Economic Value Added EVA tDO O cid 9 O COD I C3 D00 b 7D A 630 000 C 157 500 D 600 000 D S bOOD I1 DD 11 The Tandem division of the Great Adventures Cycles Company had the following results last cid 9 11 P year in thousands Sales Operating income Total assets Current liabilities 4 000 000 480 000 2 000 000 300 000 Management s target rate of return is 10 and the weighted average cost of capital is 8 Its effective tax rate is 40 cid 9 What is the Tandem division s Residual Income RI cid 9 A 152 000 cid 9 B 8 000 000 cid 9 C 320 000 cid 9 280 000 Li 2 cid 9 00 xe 0OQ VQ t o oo o 2O O 0 1204he following data relates to the Miracle Corporation and its Toy Division cid 9 12 Toy Division sales Toy Division operating income Toy Division total assets Toy Division current liabilities Corporate target rate of return Corporate weighted average cost of capital Corporate effective tax rate 8 000 000 480 000 2 000 000 600 000 14 10 30 What is the Toy Division s Economic Value Added EVA A 336 000 cid 9 0 196 000 cid 9 C 140 000 cid 9 D 200 000 Or cid 9 o oQt i z 00 01000 oo J 3 cid 9 33 DOO 51 5J 3 D 00 ODO Vlt 000
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