XYZ INC Has Several Divisions and the One Managed by Dr

question 16

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 $3 million. If the new project is on, Mr. Donaldson's bonus should not be based on:

• A) EVA.
• B) ROA.
• C) Sales.
• D) Accounting profits.
• E) Cash flows.

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Definitions:

Interrole Conflict

A psychological tension that arises when the demands of one role an individual occupies conflict with those of another role.

Intrarole Conflict

A psychological dilemma where an individual faces conflicting expectations related to a single role they occupy.

Person-Role Conflict

Arises when an individual's values, beliefs, or needs conflict with the expectations of their role within an organization.

Security Interest

A legal claim or lien on collateral, ensuring the repayment of a debt or obligation.