Which of the Following Statements Is False About Expectancy Theory

question 102

Multiple Choice

Which of the following statements is false about expectancy theory assumptions?

• A) People choose among different courses of action.
• B) People choose actions based on outcome values.
• C) The choices among actions are rational.
• D) Environmental factors do not affect choice.

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Definitions:

Residual Income

The net income an entity generates above its required rate of return or cost of capital.

Return On Investment

A performance measure used to evaluate the efficiency or profitability of an investment, calculated by dividing net profit by the cost of the investment.

Indirect Expenses

Costs not directly attributable to the production of a specific product or service, such as administrative salaries and utilities.

Expense Allocation

Expense allocation is the process of distributing expenses across various departments, projects, or products to accurately reflect where the costs were incurred.