A Financial Manager Who Does Not Follow the General Constraints

question 6

Multiple Choice

A financial manager who does not follow the general constraints of the NPV rule may:

• A) accept a negative NPV project for fear of losing an investment opportunity.
• B) accept a marginally acceptable NPV project limiting the corporation's ability to choose a competing project.
• C) not consider all options available in a capital budgeting decision.
• D) not take a positive NPV project even if the NPV is adequate reward to forego the option.
• E) All of

Identify the characteristics and implications of professional corporations in the legal industry.

Understand the concept and implications of efficiency wages in labor markets.

Analyze how efficiency wages influence labor demand, labor supply, and unemployment.

Evaluate the impact of technological advancements on monitoring workers and its effect on efficiency wages.

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Definitions:

Drawing Account

An account used to track withdrawals made by the owner of a sole proprietorship from the business for personal use.

Temporary Account

An account in financial accounting that is used to collect revenues, expenses, and withdrawal information which is transferred to permanent accounts at the end of an accounting period.

Accumulated Depreciation

The total amount of a company's assets' depreciation since the assets were acquired, reflecting how much of the assets' value has been used up over time.

Drawing Account

An account used to record withdrawals of cash or other assets from a business by the owner for personal use.