Which of the Following Conditions Might Lead a Financial Manager

question 18

Multiple Choice

Which of the following conditions might lead a financial manager to decide to expedite a positive Net Present Value investment project that previously he/she had decided to delay?

• A) The risk-free interest rate increases.
• B) Uncertainty about future project value increases.
• C) The cash inflows generated by the project is lower than previously thought.
• D) Investment required for the project is expected to increase in the near future.

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Definitions:

Primacy Effect

The tendency to remember and give more importance to information that is encountered first in a list or series, as opposed to information that appears later.

Promotion Focus

A motivational state where an individual is primarily oriented towards achieving positive outcomes and realizing ambitions.

Approach of Positive

A methodology or mindset that emphasizes focusing on positive aspects, strengths, and constructive outcomes in various situations.

Self-Esteem

An individual's subjective evaluation of their own worth, encompassing beliefs about oneself as well as emotional states such as triumph, despair, pride, and shame.