Question 1

a.) Real options provide managers flexibility to decide on projects not mainly based on NPV, CBA, or CBR. The other factors which could be strategic are b.) the option to contract, where you increase the manpower; c.)  The option to abandon where you are already invested but would benefit more if you abandon it; d.) option to expand to grow your production; e.) the option to wait where the timing of implementing the project is considered; f.) the option to switch is which you completely turn to a different industry.

Accepted Answer

Statements a, c, d, and e are correct

Answer

All the statements are correct.

Answer

Statements a, d, e, and f are correct.

Answer

Statements a,b, c, d, and f are correct

Question 2

Annual cash flows are important to know the financial requirements and revenue earning potential to judge the capacity to repay loan. In preparing the cash flow, all cash payments are considered costs, and cash receipts are benefits.

Accepted Answer

True

Answer

False

Question 3

When we lend money, we are deferring until the future the possibility of using that money for present consumption, and if we lend money, we are entitled to a reward: interest. Which of the following is the appropriate formula to compute the value of an amount lent at an interest rate in a future time period?

Accepted Answer

A=P(1+i)n

Answer

A=Cn(1+i)n

Answer

P=A/(1+i)n

Answer

A=B(1+i)n

Question 4

Which of the following is NOT part of the financing strategy?

Accepted Answer

Return Benefit Analysis

Answer

Time Value of Money

Answer

Cost Benefit Analysis

Answer

Sensitivity Analysis

Question 5

!3 POINTS! A factory costs P800,000. You reckon that it will produce an inflow after operating costs of P170,000 a year for 10 years. If the opportunity cost of capital is 14%, what is the net present value of the factory? Is it a financially viable investment? Use excel or NPV formula  P=A/(1+i)n to compute.

Accepted Answer

NPV of the Factory is P86,740. It is a financially viable investment.

Answer

NPV of the Factory is P88,740. It is a financially viable investment.

Answer

NPV of the Factory is P87,740. It is not a financially viable investment.

Answer

NPV of the Factory is P85,740. It is not a financially viable investment.

Question 6

In order to have an effective strategic alignment, a.) a clear, agreed-on vision and strategy; b.) clarity on individual roles and requirements in supporting the strategic goals; c.) sufficient capabilities to deliver the behaviors needed to reach the goals; d.) timely feedback on goal attainment are necessary.

Accepted Answer

All the statements are correct.

Answer

Statements a, b, and d are correct.

Answer

Statements a, c, and d are correct.

Answer

Statements b, c, and d are correct.

Question 7

Which of the following is NOT part of the components of strategic alignment?

Accepted Answer

Effective Financial Management & Skills Management.

Answer

None of the above.

Answer

Strategic Fit and Organizational Alignment

Answer

Human Capital Alignment & Planning and Control Systems Alignment

Question 8

The ultimate proof of a strategically aligned organization is an exemplary focused performance that brings about breakthrough results.

Accepted Answer

True

Answer

False

Question 9

*2 POINTS* The figure below (Figure 14) shows the result of a survey conducted among Philippine Army personnel in 2013 regarding their perception on the presence or absence of subsidiary scorecards. Considering the four components of strategic alignment (strategic fit, organizational alignment, human capital alignment, planning & control system alignment), what do you think is the major area of concern that needs to be addressed or improved? How do you address this major area of concern? What are your recommended actions?  You may also send your answer to ylp@isacenter.org to further explain your answer if you wish.

Accepted Answer

All of the above.

Answer

Effectively cascade the Army scorecard to lower units/teams by making sure that the vision and strategic goals are understood by everyone.

Answer

Ensure alignment of organizational goals to unit/team objectives.

Answer

Break down or translate the organizational goals & performance measure into unit/team objectives and performance measures.

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