Page 20 - Microsoft Word - 00 CIMA F1 Prelims STUDENT 2018.docx

Chapter 1

Example 2

Value for money is an important objective for not-for-profit organisations.

Which action is LEAST consistent with increasing value for money?

A Using a cheaper source of goods without decreasing the quality of the
not-for-profit organisation services

B Searching for ways to diversify the finances of the not-for-profit
organisation

C Decreasing waste in the provision of a service by the not-for-profit
organisation

D Focusing on meeting the objectives of the not-for-profit organisation

Solution

The answer is (B).

VFM is about achieving economy, effectiveness and efficiency. (A) achieves
economy. (C) achieves efficiency and (D) achieves effectiveness.

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