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Control Systems, Economic Value Added, ROI Techniques

Control systems in nonprofit organizations will never be as highly developed as in profit-seeking organizations.  Do you agree or disagree? Give three reasons why.

Define economic value added (EVA) and describe three ways a company can improve its EVA. Is EVA beneficial, if so, why? If not, why not?

What is the major benefit of the ROI technique for measuring performance? What two major items affect ROI? Both ROI and economic profit use profit and invested capital to measure performance. Therefore it really doesn't matter which we use.  Do you agree or disagree? Explain

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Control systems in nonprofit organizations will never be as highly developed as in profit-seeking organizations. Do you agree or disagree? Give three reasons why.

I do not agree because many times nonprofit organizations have less resources and therefore need stronger ways to develop efficient control mechanisms to conserve the funds they do have. Since the major of non-profit organizations depend on discretionary funding from sources such as donations or gifts they must develop extremely intricate and effective control systems. Even though the goal of the non-profit is primarily different than a for profit organization they still must provide as much of value to the dollar that they can. Just because of the goal of the for-profit organization is money and the goal of the non-profit is a cause does not mean that they are different because they are still trying to create value by developing control mechanisms. Many states in response to deficits have made budget cuts and continuing to do so. The non-profit organizations are ...

Solution Summary

The Solution addresses whether control systems are as developed in nonprofit organizations as in for profit organizations. It provides a definition of economic value added and identifies three ways to improve it, as well as the benefits of EVA. ROI id discussed as a tool for measuring performance.

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