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Chapter 13 Quiz 4
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1
The problems associated with ROI can be minimised by using alternative financial measures, such as residual income or economic value added:
A)True
B)False
2
The four aspects of value-based management are valuation, strategy, motivation and corporate finance:
A)True
B)False
3
Group incentive plans reward individuals for achieving individual performance targets:
A)True
B)False
4
Herzberg’s theory suggests that hygiene factors, such as working conditions, wage levels, rules and regulations, relationships with colleagues and job security are all strong motivators:
A)True
B)False
5
To increase the value of a firm, managers need to understand the drivers of value. Value drivers are the activities or actions that create value for a business. One of these drivers is spread:
A)True
B)False
6
The corporate value of the company is calculated as the future value (FV) of the cash flows plus the residual value of the business. The PV of cash flows from operations is for a certain forecast period (such as 10 years):
A)True
B)False
7
Using gross book value has more advantages than using net book value as a measure of invested capital:
A)True
B)False







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