A Division Manager Was Considering a Project That Required a Significant

question 71

Multiple Choice

A division manager was considering a project that required a significant initial investment.If accepted,the project could have a negative impact on certain financial ratios that the firm was required to maintain to satisfy debt contracts.To ensure that the ratios would not be adversely affected by the investment,the manager would use which of the following capital investment models?

• A)Payback period
• B)Accounting rate of return
• C)Net present value
• D)Internal rate of return
• E)None of these

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Definitions:

Digital Watch

A portable timepiece designed to be worn on the wrist, incorporating digital technology to display the time electronically.

Systems Theorists

Systems theorists are scholars and practitioners who study the complex interrelationships within organizational structures, believing that understanding these dynamics is key to solving problems and enhancing efficiency.

Complex Adaptive Systems

Systems that are made up of multiple, interrelated components which adapt and evolve in response to changes in the environment.

Contingency Approach

A management theory that suggests the most appropriate form of decision making is contingent upon the internal and external situation.