Which of the Following Statements About "Black Empowerment" Is FALSE

question 7

Multiple Choice

Which of the following statements about "Black empowerment" is FALSE?

• A) It has involved legislation that requires all companies in South Africa to hire a certain percentage of Africans.
• B) Those who have benefited the most have often been politically well connected.
• C) It has involved legislation that requires companies that win government contracts allocate shares to Blacks and other previously disadvantaged people.
• D) Although there is limited evidence that it has produced a substantial rise in the number of Black-owned companies, there is significant evidence that it has increased black participation in the economy.
• E) It has not reduced Black poverty and may, in fact, have promoted economic inefficiencies that have curbed growth and job creation.

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Definitions:

Initial Cost

Initial cost is the total expense incurred to acquire an asset or start a project, including purchase price and all related fees.

Net Present Value (NPV)

A financial metric that calculates the difference between the present value of cash inflows and the present value of cash outflows over a period of time, used to assess the profitability of investments.

Internal Rate of Return (IRR)

A financial metric used to evaluate the profitability of investments, representing the discount rate that makes the net present value of all cash flows from a particular project equal to zero.

Cost of Capital

The rate of return that a company must pay to its capital providers, including both equity and debt holders, for using their capital in the business.