Worldatwork c8 60 Exam Practice Test Instant Access

Question 1

Regarding compensation communications with executives, where do they tend to need the greatest level of understanding?

AIn the methods and processes used to make pay decisions

BIn the details of their individual compensation packages

CIn the overall program objectives

DIn the differences in pay levels for the different levels of the organization

Answer : C

Question 2

Internal process metrics are most useful in which of the following situations?

AAssessing how well the business is running

BDetermining employee satisfaction levels

CMeasuring the financial success of the business

DEvaluating customer perceptions of products or services

Answer : A

Question 3

What happens to the marginal cost if revenue accelerates slower than variable costs but fixed costs remain the same?

AIt remains the same.

BIt decreases because variable costs are increasing.

CIt increases at the same rate as variable costs.

DIt becomes increasingly higher as revenues increase.

Answer : D

Question 4

If a company has a higher percentage of employees with fixed compensation than variable compensation, what happens as revenues increase?

ACompensation costs eventually stabilize and become a consistent percent of revenue.

BCompensation costs and revenue increase at approximately the same rate.

CCompensation costs eventually decrease as a percent of revenue, increasing profit growth.

DCompensation costs remain the same as a percent of revenue until variable compensation costs exceed fixed compensation costs.

Answer : C

Question 5

Which of the following best describes present value?

AThe current value of holdings

BThe current value of holdings and how much it will grow over time at a given rate of return

CThe desired value in the future and what needs to be invested today to realize that amount

DThe difference between the desired value in the future and the current value as a percentage of the desired value

Answer : C

Question 6

What challenge is most likely faced by a business with low market share and high growth potential?

AIts ability to generate profits is unknown.

BIt is in the worst market position and has insufficient resources to continue operations.

CIt is unclear how to best utilize the high cash flow to sustain growth.

DIts excess resources are often used to develop other businesses that may not be mission-critical.

Answer : A

Question 7

The Alpha Company was once a strong company that commanded a high percentage of the market it operated in. In recent years, Alpha has been losing market share to competitors in its primary line of business and has been unable to find a competitive strategy to grow and return to profitability. Given its market position, how is Alpha most likely finding the monetary resources to continue operations?

ABy using cash from other segments of the business

BBy using its high credit rating from prior years to receive a line of credit until the strategy begins to work

CBy selling its products and services at a loss until revenue increases and slowly raising prices until it begins to break even

DBy identifying and duplicating the strategy used by its main competitor.

Answer : A

Worldatwork c8 Business Acumen for Compensation Professional 60 Exam Practice Test