Revision Bitesize Planning, Control & Decision Making

Revision Bitesize Planning, Control & Decision Making Questions

What is the definition of the following terms:

1)  Sunk Costs

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2)  Net Present Value (npv)

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3)  Margin Of Safety

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4)  Balanced Scorecard

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5)  Relevant Costs

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6)  Annuity

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7)  Present Value

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8)  Break-even Point

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9)  Irrelevant Costs

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Revision Bitesize Planning, Control & Decision Making Answers

1)  A cost which has already occurred and cannot, therefore, be avoided whatever decision is taken.  It should be ignored when taking a decision.

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2)  The sum of the present values of a series of cash flows.

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3)  The gap between the level of activity at the break-even point and the actual level of activity.

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4)  A technique that assesses performance across a balanced set of four perspectives – customers, internal processes, organisational learning and growth, and financial.

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5)  Those costs of the future that will be affected by a decision.

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6)  An income-generating investment whereby, in return for the payment of a single lump sum, the annuitant receives regular amounts of income over a predefined period.

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7)  The amount that a future cash flow is worth in terms of today's money.

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8)  The level of activity at which total revenues equal total costs.

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9)  Those costs of the future that will not be affected by a decision.

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