Rubbermaid Has Set a Minimum Rate of Return of 15

question 98

Multiple Choice

Rubbermaid has set a minimum rate of return of 15 percent on all its capital investments. Fifteen percent is Rubbermaid's ________.

• A) payback period
• B) hurdle rate
• C) internal rate of return
• D) return on investment

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Definitions:

First Instinct Fallacy

The mistaken belief that an individual's initial answer to a question is more likely to be correct than any answer they might change it to upon further consideration.

False Consensus Effect

The tendency to overestimate the extent to which others share one's beliefs, attitudes, or behaviors.

False Consensus Effect

A cognitive bias whereby people overestimate the degree to which their beliefs, opinions, preferences, values, and habits are normal and typical of those of others.

False Uniqueness Effect

The tendency of people to underestimate the commonality of their abilities and desirable or successful behaviors.