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WorldatWork C8 - Business Acumen for Compensation Professional

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Total 78 questions

Assessment of current and future staffing needs should be based primarily on what?

A.

Compensation budgets only because staffing cannot exceed the funds available

B.

A combination of organizational goals and budget realities

C.

The consensus of HR management and line management estimates

D.

The opinions of senior leaders in the organization

What most accurately describes a reason why organizations use financial reports?

A.

To differentiate company financial data from industry competitors to prevent loss of proprietary information

B.

To provide subjective information to key constituents that reflects the company’s performance in the most favorable manner depending on stakeholder priorities

C.

To create a historical record of financial performance and identify trends that may justify changes in strategy

D.

To promote consistency of communication regarding company performance and value

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?

A.

500,000

B.

840,000

C.

8,000,000

D.

9,700,000

What best describes a necessary skill and/or behavior in relation to business acumen?

A.

An understanding of the culture and subcultures of your organization

B.

The capacity to manage multiple projects and priorities and meet deadlines

C.

A willingness to take on additional duties and responsibilities when resources are limited

D.

A thorough understanding of the products and/or services your organization provides

What best describes a benefit of business acumen with regard to career development?

A.

The ability to display confidence and decisiveness that will inspire others and make you a better leader

B.

A greater likelihood of promotion, especially when you are competing with individuals with more experience

C.

Increased marketability, which will lead to qualification for opportunities outside of human resources

D.

It is critical to your career development and a deficiency is very likely to hinder career advancement and success.

As a general rule, what are individual contributors most likely to ask about their compensation?

A.

What the take-home pay will be

B.

How their pay compares to co-workers

C.

How the company sets compensation budgets

D.

How the company makes pay decisions that affect them

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

A.

Earnings

B.

Shares

C.

Market capitalization

D.

Increased market value and reinvested dividends paid

What question is answered by the organization’s mission statement?

A.

What direction will we take?

B.

How do we work?

C.

Why are we in business?

D.

How will we achieve our objectives?

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

A.

Its ability to generate profits is unknown.

B.

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

C.

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

D.

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

Which of the following is the earnings available to equity owners after paying debt and taxes?

A.

EBIT

B.

EPS

C.

Net income

D.

Operating profit