Worldatwork c8 60 Exam Practice Test Instant Access

Question 1

The Delta Company has experienced increased turnover in the past two years. Data from exit interviews indicate that most of those leaving did so for better opportunities and higher compensation. If Delta pays at the highest percentile of the market for their peer group, what data analysis should they do?

AAdditional quantitative analysis to determine whether pay rates are truly competitive or existing data are unreliable

BQualitative data collection to talk to key stakeholders and employees and determine whether the exit interviews accurately reflect their concerns

CQualitative data collection in the form of an employee survey with questions about employee satisfaction with pay levels

DNo additional data analysis is needed. Delta should increase pay rates based on the existing data to decrease turnover.

Answer : B

Question 2

What best describes the primary purpose of budgeting?

ALimiting spending to a fixed percentage of organizational revenue

BMaking choices about spending based on expectations of performance

CIncreasing profitability of the business annually to maximize shareholder/owner value

DComplying with local legislation and maintaining accurate records to prepare financial reports and tax documents

Answer : B

Question 3

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 4

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 5

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 6

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 7

The XYZ Company opened a new manufacturing facility with a capital investment of 10,000,000. The cost to obtain the capital was 8%. In its first year of operations, the facility's net operating profit after taxes was 10,500,000. What was the economic value added (EVA) using the EVA formula?

A500,000

B840,000

C8,000,000

D9,700,000

Answer : D

Worldatwork c8 Business Acumen for Compensation Professional 60 Exam Practice Test