Kurt, Who Is a Divisional Manager, Continually Brags That His

question 77

Multiple Choice

Kurt, who is a divisional manager, continually brags that his division's required return for its projects is one percent lower than the return required for any other division of the firm.Which one of the following most likely contributes the most to the lower rate requirement for Kurt's division?

• A)Kurt tends to overestimate the projected cash inflows on his projects.
• B)Kurt tends to underestimate the variable costs of his projects.
• C)Kurt has the most efficiently managed division.
• D)Kurt's division is less risky than the other divisions.
• E)Kurt's projects are generally financed with debt while the other divisions' projects are financed with equity.

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Definitions:

Avpr1a Gene

A gene associated with social behavior, particularly in the regulation of pair bonding and social recognition in vertebrates.

V1a Receptors

A type of receptor in the brain that binds vasopressin, influencing social behaviors, memory, and temperature regulation.

Prediction

The act of making an educated guess about the future based on current information or trends.

Vasopressin

A hormone secreted by the pituitary gland involved in regulating water retention in the kidneys and plays roles in social behavior and bonding.