Rick Sapio,CEO of New York City Mutual

question 63

Multiple Choice

Rick Sapio,CEO of New York City Mutual.com,created this tool for involving employees in organizational change.

• A)an electronic mailbox for employees to express concerns
• B)a quality control team to review all major company decisions
• C)a reward program that pays employees for innovations
• D)an advisory board that keeps employees informed on company strategy

Identify and apply the profitability index to rank investment projects.

Calculate the net present value (NPV) of an investment to determine its financial viability.

Explain the concept of the simple rate of return and its use in evaluating investment performance.

Distinguish between cash operating costs and non-operating costs in investment appraisal.

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Definitions:

Reserve Requirement

Central bank regulations regarding the minimum amount of reserves that commercial banks must hold against deposits.

Margin Requirements

The minimum amount of equity that must be maintained in a margin account as mandated by brokers or exchanges.

Discount Rate

The interest rate charged to commercial banks and other depository institutions on loans they receive from their regional Federal Reserve Bank's lending facility.

Money Market Instruments

Short-term financial instruments that are highly liquid and designed for cash management by investors, including treasury bills, commercial paper, and certificates of deposit.