Business Strategy & Client Solutions Flashcards

A project costs $100,000 and generates $25,000 net cash inflow annually. What is the simple payback period?

Answer: 4 years

Payback is $100,000 / $25,000 = 4 years.

If a project's net present value (NPV) is positive at the firm's cost of capital, it generally means:

Answer: The project is expected to create value above the required return

A positive NPV means discounted inflows exceed the investment at the required rate.

Which tool helps a consultant see how changes in one key assumption, such as price, affect a business case outcome?

Answer: Sensitivity analysis

Sensitivity analysis tests how outcome variables respond to changes in individual inputs.

Total cost of ownership (TCO) analysis for new software should include:

Answer: Acquisition, implementation, training, maintenance, and disposal costs

TCO covers all direct and indirect costs across the asset's full lifecycle.

The Balanced Scorecard measures performance from which four perspectives?

Answer: Financial, Customer, Internal Process, Learning & Growth

Kaplan and Norton's Balanced Scorecard pairs financial measures with customer, process, and learning measures.

Which metric is a leading indicator rather than a lagging indicator?

Answer: Number of qualified sales pipeline opportunities

Pipeline volume predicts future sales, while profit and revenue report past results.

Comparing a client's processes and metrics with industry best-in-class performers is called:

Answer: Benchmarking

Benchmarking compares performance against peers or leaders to find improvement gaps.