ACCA FM · Chapter 1 · Question 4 of 10
A public sector hospital purchases its medical supplies at the lowest price available for the quality required. Which element of value for money does this illustrate?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Economy
Explanation
Value for money is assessed using the three Es. Economy means acquiring resources of the appropriate quality at the lowest cost. Efficiency is the relationship between outputs and inputs, and effectiveness is the extent to which objectives are achieved. Equity is not one of the three Es.
More Financial management function MCQs
- Q6An investor bought shares in a company for $4.00 each one year ago. During the year a dividend of $0.20 per share was paid, and the share…
- Q7A company's earnings per share (EPS) have risen from $0.32 to $0.41 over a three-year period. What is the average annual compound growth…
- Q8Which of the following is NOT one of the three key decisions normally associated with financial management?
- Q9Which of the following stakeholder objectives is MOST likely to conflict with an objective of maximising shareholder wealth by investing…
- Q10A charity is a not-for-profit organisation. Which of the following is MOST likely to be its primary objective?