1. Thegreatertheenvironmentaluncertainty,themoreimportantitisformanagerstosticktotheiroriginalplan.

   True

   False

1. Acapitalexpenditurebudgettypicallyincludesallprimaryactivitiesonwhichtheunitororganizationplanstospendmoneyandtheamountallocatedforeachitemduringtheyear.

   True

   False

2. Managersshouldassessthefirm'sinternalresourcesimmediatelyfollowingtheanalysisoftheexternalenvironment.

1. True

   False

A manager tells his sales staff that he wants sales to increase by 18 percent during this year. Even though they are skeptical about whether this goal can be reached, most of them agree to it. However, they were unable to meet the target at the end of the year. Which of the following would best explain the failure to meet this goal?

If employees are only superficially committed to the goal, it will probably not be achieved.

If employees do not believe it is possible to achieve a goal, it is probably because the goal is too vague.

If employees are skeptical that a goal can be reached, it is because they do not know how their performance will be measured.

If a goal is too specific, employees will be demotivated by the impersonal nature of the goal.

1. A manager at a local bookstore is about to allocate extra floor space to an espresso counter when a new coffee shop opens next door. He stops implementation of his plan and instead looks into opening a juice bar. This an example of which of the following?

   successful budgeting

   real-time adjustment

   sequence and timing

   management by objectives

2. A community college has to decide if more budget is to be allocated for hiring new instructors or for developing new laboratory facilities. This is an example of ________.

   determining priorities

   forecasting

   benchmarking

   contingency planning

The executive of a certain company states that the firm should adopt the benchmark practices only of other firms in the same industry, as business conditions in other industries are significantly different. Which of the following is the underlying assumption in his argument?

The argument assumes that business practices are nontransferable across industries.

The argument assumes that firms cannot find unique and significantly better ways of doing things by looking outside their competitor set.

The argument suggests that non competitors face different business conditions that make appropriate comparisons difficult.

The argument is based on the assumption that benchmarking is an ineffective tool for investigating best practices of other firms.

1. A(n) ________ specifies the amount of money a company plans to spend on specific items that have long-term use and require significant financial investments.

   capital expense budget

   mission statement

   operating budget

   white paper