Test first chapter

1. Is this the formula for :

a) Cost of Capital Rate

b) Financial Interest Rate
c) Financial value Profit based

2.- select the 3 action that belong to Managerial discretion

a) Describes latitude of action
b) Describes potential actions of a manager
c) Defines stake holders tolerance for actions and outcomes
d) Support of stake holders
e) Intersection of MA and ZoA

3.- Select the 2 environments of ZoA

a) Internal enviroment
b) Regional enviroment
c) Industry enviroment
d) Macro enviroment

4.- Select 2 elements that increase the zone of Acceptance

a) Resource availability
b) Inertial forces
c) Task Structure
d) Demand instability

5.- What is success ( choose all correct )

a) Achievement of objectives
b) Increments on FV
c) Δ in EVA
d) Creation or increments of Gross value added

6.- The comparison of own past performance and past performance of others is? (choose
all correct )
a) Measurement of success
b) The functions of aspiration level
c) Elements for objectives formulation
7 to 15.- Select true or false

T F The Objectives for the company are set by the stake holders and the objectives of
the company are set by the top management
The objectives of the company are the result of political process
EVA = Δ (GVA – OC)
Discounting makes payments out of different periods comparable
FCF can be used to pay out debt and shareholders
NOPAT = (profit + interest paid) = Capital Income
Cost of capital rate = (WACC * Invested Capital )
The Absolute perspective of EVA is reflected in % and the relative perspective ok
EVA is reflected in €

16.- Match the formulas

Financial value (cash- based)

Discounting

WACC
 17.- Arrange the following
- =
NOPAT
- =
Return spread
* =
Cost of capital
- =
EVA
/ =
ROI
/ =
Sales profit
margin
NOPAT. / WACC. / NOPAT. / ROI. / NOPAT. / EBIT. / COST OF CAPITAL.
CAPITAL INVESTED / INVESTED CAPITAL /. WACC. / REVENUES /. TAXES

18.- To wich dimension belongs the balancing procedures strategy ?

a) Profit management
b) tax management
c) Asset management
d) financial management

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