Worldatwork c8 60 Exam Practice Test Instant Access

Question 1

What best describes an effective core technique for communicating with executives?

AFocus on negative issues first, such as compensation costs exceeding budget, to get their attention

BProvide a wide range of facts and figures. With their high level of responsibility, executives must have all the data before they can make informed decisions.

CAssume they have little knowledge of the issue and make a detailed presentation leading up to the purpose of the meeting.

DRecommend a solution that will solve the issue and explain why it is the best solution available.

Answer : D

Question 2

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

Question 3

What do working capital metrics evaluate?

AThe change in working capital over a specific period of time, typically one year

BA company's efficiency in converting short-term capital into cash

CA company's mean capital expenditure per employee

DThe amount of cash needed to meet the company's short-term obligations

Answer : B

Question 4

The ''return'' represented by the Total Shareholder Return (TSR) metric is the increase in what?

AEarnings

BShares

CMarket capitalization

DIncreased market value and reinvested dividends paid

Answer : D

Question 5

Gross margin is which of the following, as percent of revenue?

ARevenue minus cost of goods sold

BExpenses plus taxes and depreciation

CGross profit minus expenses

DCost of goods sold

Answer : A

Question 6

Which of the following factors has the greatest impact on how aggressive a stance (high vs. low) an organization will take in terms of where it positions itself against the market with its compensation strategy?

AThe industry it operates in

BThe bottom line

CThe organizational headcount

DThe risk tolerance of compensation leaders

Answer : B

Question 7

If employees have a significant impact on the bottom line, what type of pay mix is most appropriate?

AA varying mix depending on employee influence on goals to provide the necessary incentive to maximize profits

B100% variable pay to motivate all employees to maximize productivity and sales

C90/10 for the majority of employees (base/variable) to share in the company's success with increased variable pay for management/executives to motivate employees to seek higher positions

DHigh base pay and low variable pay to ensure predictability of total compensation expense

Answer : A

Worldatwork c8 Business Acumen for Compensation Professional 60 Exam Practice Test