PGA PGM 3.0 LEVEL 1 TEST QUESTIONS
WITH VERIFIED ANSWERS
ThevProcessvforvdevelopingvavbusinessvplanvstartsvbeforevyouvestablishvthevgoalsvyouvwouldvlikevtovachievev
forvthevshopsvcomingvyearv-vcorrectvanswer-True
WhovshouldvprovidevdirectionvforvcreatingvthevbusinessvplanvatvavGolfvOperationv-vcorrectvanswer-
KeyvStakeholders
AccordingvtovthevbusinessvplanningvModel,vavbusinessvplanvshouldvbuildvonvandvrefinevthevoperationvplanv-
vcorrectvanswer-False
Longv-
vRangevPlanningvshouldvinitiallyvassumevanvadversarialvrelationshipvbetweenvneighboringvfacilitiesvthatvdir
ectlyvcompetevwithveachvother.v-vcorrectvanswer-True
Whatvisvthevusualvbusinessvdestinationvforvlongvrangevplanning?v-vcorrectvanswer-3-
5vyearsvAchievevitsvvision
whatvisvthevmostvsignificantvbenefitvofvstrategicvbusinessvPlanning.v-vcorrectvanswer-
Providevavlongvtermvvisionv&vDestination
HelpingvEstablishvavstartingvpointvforvgoals,vObjectives,vandvrelatedvstrategiesvisvanvappropriatevusevofvavS
WOTvanalysis.v-vcorrectvanswer-True
Youvarevinvthevprocessvofvcompletingvavbusinessvplanvforvthevgolfvshop.vInitialvforecastvofvsales,vexpenses,va
ndvprofitvhavevbeenvmade.vPastvdatavhasvbeenvanalyzedvandvimportantvinsidevandvoutsidevfactorsvhavevbe
envidentified.vWhatvisvthevnextvstepvtovbevtakenvtowardsvcompletingvthevplan?v-vcorrectvanswer-
MonitorvPerformance
AvGolfvProfessionalvisvpurchasingvavgolfvcourse.vThevbusinessvplanvhevpresentedvtovhisvbankervincludedvhisv
historyvofvoperatingvsuccessfullyvoperatingvsimilarvfacilities,vbudgetvprojectionsvforvthevfirstvfivevyearsvunde
rvhisvmanagement,vandvobjectivesvandvstrategiesvforvreachingvhisvgoals.vThevbankervrejectedvthevloanvappli
cationvbecausevofvmissingvinformation.vWhatvimportantvelementvisvmissingvfromvthevbusinessvplan?v-
vcorrectvanswer-Currentvstatevofvthevbusiness
,ThevSWOTvanalysisvwouldvtreatvopportunitiesvarevthreatsvasvfactorsvthatvusuallyvcanvbevcontrolledvbyvthevf
acility.v-vcorrectvanswer-False
ThevResultvofvavSWOTvanalysisvcouldvbevsufficientvjustificationvforvthevabandonmentvofvavcorevbusinessvfun
ctionv-vcorrectvanswer-True
StaffvevaluationvarevavrelevantvdatavsourcevforvavSWOTvanalysisv-vcorrectvanswer-True
Howvmightvrevenuesvbevaffectedvatvavnearbyvdailyvfeevcoursevifvthevlocalvtirevplantvhasvmajorvlayoffsv-
vcorrectvanswer-GovDownv(decrease)
LackvofvavmissionvstatementvisvanvexamplevofvavweaknessvthatvavSWOTvanalysisvmightvdisclosev-
vcorrectvanswer-True
Trendsvinvlocalvconsumervspendingvwouldvbevmostvusefulvforvevaluatingvavcorevbusinessvfunctionv-
vcorrectvanswer-True
Whatvshouldvgovernvthevdecisionvtovpursuevanvopportunity?v-vcorrectvanswer-Financesv-vBarriersvtoventryv-
vrecoursesv-vopportunityvcost
Goals,vObjectivesv&vstrategiesv-vcorrectvanswer-
Considervthevfollowingvthevstatementvasvpartvofvthevavbusinessvplan:v"improvevrangevprofitsvandvcustomerv
satisfaction."vAccordingvtovthevbusinessvplanningvcourse,vthisvstatementvisvanvexamplevofvanvobjective.v-
vcorrectvanswer-True
Thevnewvmanagervofvavtenv-vyearv-
voldvprivatevcoursevcurrentlyvdoingvanvaveragevofv5,v000vtournamentvroundsvpervyear,vproposesvtovincrease
vtournamentvroundsvbyv50%vbyvthevendvofvthevnextvyear.vThisvproposalvmeetsvthevcriteriavforvanveffectivevb
usinessvobjectivevasvpresentedvinvthevbusinessvplanningvcoursevmanual.v-vcorrectvanswer-True
,"DevelopvandvpromotevgroupvlessonvprogramsvaimedvatvavwomenvandvJuniors"visvanvexamplevofvanveffecti
vevbusinessvobjectives.v-vcorrectvanswer-False
WhatvImportantvCharacteristicvisvmissingvinvthevbusinessvObjectives.v"Increasevprovshopvsalesvnextvyear?"v-
vcorrectvanswer-Measurables;vHowvarevyouvgoingvtovmeasure
WhichvCharacteristicsvofvgoalsvandvobjectivesvisvdescribedvasvcapablevofvbeingvobserved,vrecorded,vandvm
easure.v-vcorrectvanswer-Quantifiable
Whatvisvfunctionallyvsignificantvdifferencevbetweenvgoalsvandvobjectives?v-vcorrectvanswer-
goalvfewvclearlyvdefinedvtargetsvobjectivesvofvhowvwevgetvthevgoal.
Avfacilitiesvfinancialvobjectivesvcouldvachievedvthroughvoperationalvstrategiesvalone.v-vcorrectvanswer-False
ThevFollowingvagendavwasvpartvofvavgolfvrangevbusinessvplan."175vdozenvrangevballsvandvrotatevusagevthre
evtimesvavyear.vWho:vHeadvProfessional.vWhen:vEndvofvFirstvQuarter.vCost:v$1500"vAccordingvtovthevbusine
ssvplanvcomponentvrepresentedvbyvthisvstatement?v-vcorrectvanswer-.......
WhatvisvanvexamplevofvavfinancialvStrategy?v-vcorrectvanswer-
BorrowingvMoney:vDebt:vReducevoperatingvexpense.
Whatvwouldvbevthevmostvappropriatevinitialvresponsevtovavfacilityvincomevnotvmeetingvprojections.v-
vcorrectvanswer-.......
Financial,vForecast,vandvBudgetsv-vcorrectvanswer-
Calculatingvyieldvinvolvesvknowingvthevrelationshipvbetweenvthevamountvutilizedvandvthevamountvavailabl
e.v-vcorrectvanswer-True
GrossvProfitvisvwhatvremainsvaftervcalculatingvthevdifferencevbetweenvrevenuevandvcostvofvgoodsv-
vcorrectvanswer-True
, Linearvtrendvanalysisvandvbasevyearvanalysisvarevexamplevofvverticalvanalysisv-vcorrectvanswer-False
ThevDivisorvinvthevlinearvtrendvformulav-
vaveragevpercentagevisvthevnumbervofvyearsvofvchangevbeingvmeasured.v-vcorrectvanswer-True
Conductingvavbasevyearvanalysisvisvavgoodvchoicevforvavfacilityvthatvhasvjustvcompletedvavprojectvthatvadded
vninevnewvholesvtovthevoriginalv9v-vholevcoursev-vcorrectvanswer-True
GolfvShopvsalesvofv$100,000vyieldvgrossvmarginvofv$30,000,vWhatvisvthevpercentvofvthevcostvofvgoods.v-
vcorrectvanswer-30%
Whatvisvthevdefinitionvofv"costvofvgoodsvsold"v-vcorrectvanswer-Costvusedvtovbyvstock
Ifvthevgrossvtargetvmarginvforvyourvgolfvshopvwerevaboutv40%,vwhatvwouldvbevthevtargetv%vforvyourvcostvofv
goodsvsold?v-vcorrectvanswer-60%
Accordingvtovthevbusinessvplanningvcoursevmanual,vwhatvisvusuallyvthevlargestvcontributorvtovthevbottomvli
nevprofitvofvthevfacilityv-vcorrectvanswer-Rounds
WhatvisvthevformulavforvMerchandisevNetvOperatingvIncome?v-vcorrectvanswer-RevenuevGeneratedv-
vOperatingvExpense
Whatveventsvwouldvcausevavchangevinvthevforecastvforvthevgolfvshopvexpense?v-vcorrectvanswer-
Whatvmetricvshouldvbevpartvofveveryvforecastvregardlessvofvthevtypevofvthevfacilityv-vcorrectvanswer-
AvVisionvdefinesvthevshortv-vTermvobjectivesvthatvmustvbevaccomplishedvinvthevupcomingvyear.v-
vcorrectvanswer-False
AvFacilityvprofilevdefinesvthevoverallvculturevofvthevbusinessv-vcorrectvanswer-True
WITH VERIFIED ANSWERS
ThevProcessvforvdevelopingvavbusinessvplanvstartsvbeforevyouvestablishvthevgoalsvyouvwouldvlikevtovachievev
forvthevshopsvcomingvyearv-vcorrectvanswer-True
WhovshouldvprovidevdirectionvforvcreatingvthevbusinessvplanvatvavGolfvOperationv-vcorrectvanswer-
KeyvStakeholders
AccordingvtovthevbusinessvplanningvModel,vavbusinessvplanvshouldvbuildvonvandvrefinevthevoperationvplanv-
vcorrectvanswer-False
Longv-
vRangevPlanningvshouldvinitiallyvassumevanvadversarialvrelationshipvbetweenvneighboringvfacilitiesvthatvdir
ectlyvcompetevwithveachvother.v-vcorrectvanswer-True
Whatvisvthevusualvbusinessvdestinationvforvlongvrangevplanning?v-vcorrectvanswer-3-
5vyearsvAchievevitsvvision
whatvisvthevmostvsignificantvbenefitvofvstrategicvbusinessvPlanning.v-vcorrectvanswer-
Providevavlongvtermvvisionv&vDestination
HelpingvEstablishvavstartingvpointvforvgoals,vObjectives,vandvrelatedvstrategiesvisvanvappropriatevusevofvavS
WOTvanalysis.v-vcorrectvanswer-True
Youvarevinvthevprocessvofvcompletingvavbusinessvplanvforvthevgolfvshop.vInitialvforecastvofvsales,vexpenses,va
ndvprofitvhavevbeenvmade.vPastvdatavhasvbeenvanalyzedvandvimportantvinsidevandvoutsidevfactorsvhavevbe
envidentified.vWhatvisvthevnextvstepvtovbevtakenvtowardsvcompletingvthevplan?v-vcorrectvanswer-
MonitorvPerformance
AvGolfvProfessionalvisvpurchasingvavgolfvcourse.vThevbusinessvplanvhevpresentedvtovhisvbankervincludedvhisv
historyvofvoperatingvsuccessfullyvoperatingvsimilarvfacilities,vbudgetvprojectionsvforvthevfirstvfivevyearsvunde
rvhisvmanagement,vandvobjectivesvandvstrategiesvforvreachingvhisvgoals.vThevbankervrejectedvthevloanvappli
cationvbecausevofvmissingvinformation.vWhatvimportantvelementvisvmissingvfromvthevbusinessvplan?v-
vcorrectvanswer-Currentvstatevofvthevbusiness
,ThevSWOTvanalysisvwouldvtreatvopportunitiesvarevthreatsvasvfactorsvthatvusuallyvcanvbevcontrolledvbyvthevf
acility.v-vcorrectvanswer-False
ThevResultvofvavSWOTvanalysisvcouldvbevsufficientvjustificationvforvthevabandonmentvofvavcorevbusinessvfun
ctionv-vcorrectvanswer-True
StaffvevaluationvarevavrelevantvdatavsourcevforvavSWOTvanalysisv-vcorrectvanswer-True
Howvmightvrevenuesvbevaffectedvatvavnearbyvdailyvfeevcoursevifvthevlocalvtirevplantvhasvmajorvlayoffsv-
vcorrectvanswer-GovDownv(decrease)
LackvofvavmissionvstatementvisvanvexamplevofvavweaknessvthatvavSWOTvanalysisvmightvdisclosev-
vcorrectvanswer-True
Trendsvinvlocalvconsumervspendingvwouldvbevmostvusefulvforvevaluatingvavcorevbusinessvfunctionv-
vcorrectvanswer-True
Whatvshouldvgovernvthevdecisionvtovpursuevanvopportunity?v-vcorrectvanswer-Financesv-vBarriersvtoventryv-
vrecoursesv-vopportunityvcost
Goals,vObjectivesv&vstrategiesv-vcorrectvanswer-
Considervthevfollowingvthevstatementvasvpartvofvthevavbusinessvplan:v"improvevrangevprofitsvandvcustomerv
satisfaction."vAccordingvtovthevbusinessvplanningvcourse,vthisvstatementvisvanvexamplevofvanvobjective.v-
vcorrectvanswer-True
Thevnewvmanagervofvavtenv-vyearv-
voldvprivatevcoursevcurrentlyvdoingvanvaveragevofv5,v000vtournamentvroundsvpervyear,vproposesvtovincrease
vtournamentvroundsvbyv50%vbyvthevendvofvthevnextvyear.vThisvproposalvmeetsvthevcriteriavforvanveffectivevb
usinessvobjectivevasvpresentedvinvthevbusinessvplanningvcoursevmanual.v-vcorrectvanswer-True
,"DevelopvandvpromotevgroupvlessonvprogramsvaimedvatvavwomenvandvJuniors"visvanvexamplevofvanveffecti
vevbusinessvobjectives.v-vcorrectvanswer-False
WhatvImportantvCharacteristicvisvmissingvinvthevbusinessvObjectives.v"Increasevprovshopvsalesvnextvyear?"v-
vcorrectvanswer-Measurables;vHowvarevyouvgoingvtovmeasure
WhichvCharacteristicsvofvgoalsvandvobjectivesvisvdescribedvasvcapablevofvbeingvobserved,vrecorded,vandvm
easure.v-vcorrectvanswer-Quantifiable
Whatvisvfunctionallyvsignificantvdifferencevbetweenvgoalsvandvobjectives?v-vcorrectvanswer-
goalvfewvclearlyvdefinedvtargetsvobjectivesvofvhowvwevgetvthevgoal.
Avfacilitiesvfinancialvobjectivesvcouldvachievedvthroughvoperationalvstrategiesvalone.v-vcorrectvanswer-False
ThevFollowingvagendavwasvpartvofvavgolfvrangevbusinessvplan."175vdozenvrangevballsvandvrotatevusagevthre
evtimesvavyear.vWho:vHeadvProfessional.vWhen:vEndvofvFirstvQuarter.vCost:v$1500"vAccordingvtovthevbusine
ssvplanvcomponentvrepresentedvbyvthisvstatement?v-vcorrectvanswer-.......
WhatvisvanvexamplevofvavfinancialvStrategy?v-vcorrectvanswer-
BorrowingvMoney:vDebt:vReducevoperatingvexpense.
Whatvwouldvbevthevmostvappropriatevinitialvresponsevtovavfacilityvincomevnotvmeetingvprojections.v-
vcorrectvanswer-.......
Financial,vForecast,vandvBudgetsv-vcorrectvanswer-
Calculatingvyieldvinvolvesvknowingvthevrelationshipvbetweenvthevamountvutilizedvandvthevamountvavailabl
e.v-vcorrectvanswer-True
GrossvProfitvisvwhatvremainsvaftervcalculatingvthevdifferencevbetweenvrevenuevandvcostvofvgoodsv-
vcorrectvanswer-True
, Linearvtrendvanalysisvandvbasevyearvanalysisvarevexamplevofvverticalvanalysisv-vcorrectvanswer-False
ThevDivisorvinvthevlinearvtrendvformulav-
vaveragevpercentagevisvthevnumbervofvyearsvofvchangevbeingvmeasured.v-vcorrectvanswer-True
Conductingvavbasevyearvanalysisvisvavgoodvchoicevforvavfacilityvthatvhasvjustvcompletedvavprojectvthatvadded
vninevnewvholesvtovthevoriginalv9v-vholevcoursev-vcorrectvanswer-True
GolfvShopvsalesvofv$100,000vyieldvgrossvmarginvofv$30,000,vWhatvisvthevpercentvofvthevcostvofvgoods.v-
vcorrectvanswer-30%
Whatvisvthevdefinitionvofv"costvofvgoodsvsold"v-vcorrectvanswer-Costvusedvtovbyvstock
Ifvthevgrossvtargetvmarginvforvyourvgolfvshopvwerevaboutv40%,vwhatvwouldvbevthevtargetv%vforvyourvcostvofv
goodsvsold?v-vcorrectvanswer-60%
Accordingvtovthevbusinessvplanningvcoursevmanual,vwhatvisvusuallyvthevlargestvcontributorvtovthevbottomvli
nevprofitvofvthevfacilityv-vcorrectvanswer-Rounds
WhatvisvthevformulavforvMerchandisevNetvOperatingvIncome?v-vcorrectvanswer-RevenuevGeneratedv-
vOperatingvExpense
Whatveventsvwouldvcausevavchangevinvthevforecastvforvthevgolfvshopvexpense?v-vcorrectvanswer-
Whatvmetricvshouldvbevpartvofveveryvforecastvregardlessvofvthevtypevofvthevfacilityv-vcorrectvanswer-
AvVisionvdefinesvthevshortv-vTermvobjectivesvthatvmustvbevaccomplishedvinvthevupcomingvyear.v-
vcorrectvanswer-False
AvFacilityvprofilevdefinesvthevoverallvculturevofvthevbusinessv-vcorrectvanswer-True
