XYZ INC Has Several Divisions and the One Managed by Dr

question 44

Multiple Choice

XYZ INC has several divisions and the one managed by Dr. Donaldson has asset base of $4 million and earnings after taxes is $2 million. A new project would earn $2 million per year on an investment of $5 million. As a result, ROA of the division changed from:

• A) 50% to 44%.
• B) 55% to 40%.
• C) 44% to 50%.
• D) 50% to 70%.

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Definitions:

Cognitive Dissonance Theory

A theory suggesting that individuals experience discomfort when holding two or more conflicting cognitions, leading them to change their attitudes, beliefs, or actions to reduce the dissonance.

Human Consistency

The tendency of an individual to maintain the same behaviors, attitudes, and beliefs over time.

Natural Disasters

Severe and extreme weather events or geological occurrences that cause significant damage, disruption, or loss of life, such as earthquakes, floods, or hurricanes.

Organizing

The process of arranging or structuring elements in a systematic way to achieve specific objectives or goals.