Worldatwork CECP Exam Practice Test Instant Access

Question 1

Which of the following are the two primary elements of benefits?

AMental health coverage and health care coverage

BPay for time not worked and income protection programs

CUnemployment and disability

DDefined contribution and defined benefits plans

Answer : B

Question 2

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 3

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 4

Regarding fixed and variable costs, what tends to happen as revenue increases?

AVariable costs decrease

BFixed costs decrease

CVariable costs increase and consume a higher percent of revenue

DFixed costs remain the same and consume a lower percent of revenue

Answer : D

Question 5

Which of the following is the best example of a variable cost?

AAudit fees

BRent

CMaintenance

DShipping

Answer : D

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 CECP Certified Executive Compensation Professional Exam Practice Test