An Effective Balanced Scorecard Helps to Communicate the Strategy to All

question 89

True/False

An effective balanced scorecard helps to communicate the strategy to all members of the organization by translating the strategy into a coherent and linked set of understandable and measurable operational targets.

---

Definitions:

Profitability Index

A financial tool used to determine the desirability of an investment, calculated as the present value of future cash flows divided by the initial investment cost.

Internal Rate of Return

A financial metric that estimates the profitability of potential investments by calculating the discount rate that makes the net present value of all cash flows from a project equal to zero.

Internal Rate of Return

The discount rate at which the net present value of all cash flows from a project equals zero, used to assess the profitability of potential investments.

Cost of Capital

The rate of return that a company must earn on its investment projects to maintain its market value and attract funds.