A Company Evaluating Projects When There Is a Resource Constraint

question 13

True/False

A company evaluating projects when there is a resource constraint should simply choose the projects with the highest NPV.

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Definitions:

Decentralised Firms

Companies that grant a high degree of autonomy to their subdivisions or units, allowing for decision-making and operations to be managed locally.

Goal Congruence

The alignment of individual objectives with the overall objectives of the organization, ensuring that all members are working towards the same goals.

Transfer Price

The pricing of goods, services, or tradable assets between affiliated divisions within the same organization.

Autonomy

The degree of self-governance or independence an individual or entity has to make decisions without external influence.