The "Like Me" Bias Is Inconsistent with Social Categorization Theory

question 64

True/False

The "like me" bias is inconsistent with social categorization theory.

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Definitions:

IRR

Internal Rate of Return; a financial metric used to evaluate the profitability of investments, representing the discount rate that makes the net present value (NPV) of all cash flows equal to zero.

Net Cash Flows

The difference between a company's cash inflows and outflows during a specific period, representing its ability to generate value.

Depreciation

The accounting entry allocating the cost of a long-lived asset against income over the asset’s life. Depreciation is a noncash charge, so net income is generally less than true cash flow by at least the amount of depreciation.

Opportunity Costs

The cost of foregoing the next best alternative when making a decision.