Which of the Following Statements Is CORRECT

question 61

Multiple Choice

Which of the following statements is CORRECT?

• A) An example of an externality is a situation where a bank opens a new office, and that new office causes deposits in the bank's other offices to increase.
• B) The NPV method automatically deals correctly with externalities, even if the externalities are not specifically identified, but the IRR method does not.This is another reason to favor the NPV.
• C) Both the NPV and IRR methods deal correctly with externalities, even if the externalities are not specifically identified.However, the payback method does not.
• D) Identifying an externality can never lead to an increase in the calculated NPV.
• E) An externality is a situation where a project would have an adverse effect on some other part of the firm's overall operations.If the project would have a favorable effect on other operations, then this is not an externality.

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Definitions:

Structural Variables

Elements or factors that define the organization's structure, such as hierarchy levels, departmentalization, and the distribution of authority and responsibilities.

Organization Structure

The system of roles, responsibilities, and authority within an organization that defines how activities are directed towards the achievement of organizational goals.

Classical Management

A theory of management emphasizing efficiency, hierarchy, and rigid organizational structures, focusing on organizational and managerial practices for efficiency.

Task Behaviour

The actions and activities an employee undertakes as part of their job responsibilities.