A Source of Construct Invalidity Is

question 36

Multiple Choice

A source of construct invalidity is:

• A) bias
• B) random error
• C) carry-over effects
• D) counterbalancing

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Definitions:

NPV

Net Present Value (NPV) is a method used in capital budgeting to evaluate the profitability of an investment or project by calculating the difference between the present value of cash inflows and outflows.

Cost of Capital

Cost of capital represents the return rate an entity must pay to its stakeholders in order to justify the use of capital in the business.

Initial Outflow

The initial cash expenditure required to undertake an investment or project.

Average Accounting Return

A measure of investment profitability calculated as the average annual net earnings of a project divided by the average investment in the project.