Shawn's Health Care Is Considering a Project Which Will Produce

question 16

Multiple Choice

Shawn's Health Care is considering a project which will produce sales of $1.7 million a year for the next ten years. The profit margin is estimated at 8 percent. The project will cost $2.9 million and will
Be depreciated straight-line to a zero book value over the life of the project. Shawn's has a required
Accounting return of 9 percent. This project should be _____ because the AAR is _____.

• A) Accepted; 8.44 percent
• B) Accepted; 9.38 percent
• C) Accepted; 9.82 percent
• D) Rejected; 8.44 percent
• E) Rejected; 9.38 percent

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Definitions:

Halo Effect

Uses one attribute to develop an overall impression of a person or situation.

Self Schema

A cognitive framework comprising beliefs and ideas about oneself that guides processing of self-relevant information.

Script Schema

Cognitive frameworks that provide knowledge about the sequence of actions that are typically involved in particular social scenarios.

Domestic Schema

A cognitive framework that organizes information related to household or familial roles, responsibilities, and dynamics.