The Halo Effect Is

question 71

Multiple Choice

The halo effect is:

• A) when observational methods and ratings scales will likely not be an effective tool to use due to the vague nature of the attribute being observed.
• B) when the overall impression of an individual clouds the rating of that person in one select area.
• C) when the individual doing the rating identifies with the person being rated and thus rates the individual inaccurately.
• D) when an individual is being too nice in his or her ratings of another.

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Definitions:

Scrap Value

The estimated resale value of an asset at the end of its useful life, often considered in depreciation calculations.

Salvage Value

The expected market value an asset will achieve when it is disposed of after its life cycle.

Payback Period

The length of time it takes for an investment to recover its initial cost out of the cash inflows that it generates.

Simple Rate of Return

A method of investment appraisal that calculates the annual incremental net operating income as a percentage of the initial investment.