Fayol Believed That Decision-Making Authority Should Remain in the Hands

question 135

Multiple Choice

Fayol believed that decision-making authority should remain in the hands of top management:

• A)in large organizations,but should be delegated to middle and first-line managers in small organizations.
• B)in all types and sizes of organizations.
• C)only in organizations subjected to a significant government regulation.
• D)in small organizations,but should be delegated to middle and first-line managers in large organizations.

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Definitions:

Internal Rate of Return

A financial metric used to evaluate the profitability of potential investments, calculated as the rate of return that makes the net present value of all cash flows from a particular project equal to zero.

Reinvestment Assumption

The premise in finance that cash flows received from an investment will be reinvested at a certain rate, affecting future cash flows and the overall return.

Cost of Capital

The rate of return that capital could be expected to earn in an alternative investment of equal risk.

Capital Budgeting

The process a business undertakes to evaluate potential major projects or investments, analyzing the expected cash flows to determine their profitability.