A Manager Who Adjusts Discount Rates by Using a "Fudge

question 57

True/False

A manager who adjusts discount rates by using a "fudge factor" is more likely to penalize short-term projects as opposed to long-term projects.

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Definitions:

TSX

Toronto Stock Exchange, the largest stock exchange in Canada and the third largest in North America by market capitalization.

Market Value

The existing market price for the acquisition or disposal of an asset or service.

Auction Markets

Marketplaces where buyers and sellers bid on assets, with the highest bid winning the asset.

OTC

Over-the-Counter (OTC) refers to the process of trading securities directly between two parties without the oversight of an exchange.