Choose the right answer

1)

What does the saying "you manage what you measure" mean?

a) The only important activities are those that can be reliably measured.

b) Managers will only measure what they have expertise in.

c) Whatever the organization chooses to measure will become its focus.

d) If the organization doesn't measure something, performance in that area will never improve.

2. Matthias Reimann is the paint shop manager for an auto manufacturer. The company bought a new paint booth for $100,000, and it is being depreciated using the straight-line method over 10 years. The cash flow generated from the paint booth is steady, at approximately $25,000 per year. At the end of the second year, the market value of the paint booth, after subtracting the costs to sell it, is estimated to be $80,000. What is the return on investment (ROI) for the paint booth for Year 3, assuming that the net book value method is used and that the opening and ending investment levels are averaged?

a) 15%

b) 20%

c) 21.4%

d) 33%

3. For the Love of Dogs (FLD) is a new not-for-profit enterprise with a mandate to provide information to families who want to become dog owners. FLD's executive director, Lyssa, classified FLD's services into four categories: neutering/spaying, nutrition, safety, and training/behaviour. For each category, services were designed to provide education and low-cost alternatives to dog owners, such as distributing donated crates for training and safely transporting dogs. Lyssa set up a budget for each category of activities based on the demand in the area, then began approaching potential donors to secure support. She recruited two new volunteer board members: one is a veterinary technician and the other is a local breeder. Which of the following represents a mistake that Lyssa made in setting up FLD?

a) She recruited board members with professional, rather than management, expertise.

b) She did not define the organization's programs.

c) She did not follow a revenue-first method for budgeting.

d) She used top-down budgeting instead of bottom-up budgeting.

4. The Literacy Council of Greater Brookswood has a vision to eliminate illiteracy in the region. To measure progress, the council regularly tracks the literacy rates of children and adults throughout the region it serves. Which basic output measurement category does this best represent?

a) Social indicators

b) Process measures

c) Efficiency measures

d) Results measures

5. Innova Inc. is a young high-tech company specializing in creating affordable and highly customized simple technology solutions for the aging population. Innova is pursuing a blue ocean strategy and has been in business for two years. Which of the following types of standards will likely be most challenging for Innova to use as a comparison to actual performance?

a) Budgeted standards

b) Historical standards

c) Internal standards

d) External standards