Suppose a Firm's CFO Thinks That an Externality Is Present

question 30

True/False

Suppose a firm's CFO thinks that an externality is present in a project,but that it cannot be quantified with any precision-estimates of its effect would really just be guesses.In this case,the externality should be ignored-i.e.,not considered at all-because if it were considered it would make the analysis appear more precise than it really is.

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Definitions:

Preferred Brand

The brand consumers favor over others due to its quality, reliability, or other distinguishing features.

Gut Feeling

Refers to an intuitive or instinctual judgment that is made without the use of rational processes.

Aided Recall

A memory retrieval process in which cues or prompts are given to assist in recalling specific information or experiences.

Salience

Salience refers to the prominence or importance of an object, concept, or entity within a particular context.