Suppose a Firm's CFO Thinks That an Externality Is Present

question 52

True/False

Suppose a firm's CFO thinks that an externality is present in a project, but that it cannot be quantified with any precision⎯estimates of its effect would really just be guesses.In this case, the externality should be ignored⎯i.e., not considered at all⎯because if it were considered it would make the analysis appear more precise than it really is.

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Definitions:

Group Situations

Circumstances or environments in which individuals interact within a collective or group setting.

Social Facilitation

Definition: The tendency for people to perform better on tasks when they are in the presence of others, due to the arousal elicited by being watched.

Easy Puzzles

Simple or solvable problems that require minimal cognitive effort to resolve.

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Refers to increasing one's speed while moving on foot, often aimed at improving physical fitness or competing in athletic events.