Which of the Following Would Not Be Used by Firms

question 33

Multiple Choice

Which of the following would not be used by firms to deter shirking?

• A) requiring employees to post a bond
• B) offering a bonus after five years of service
• C) paying more than the market wage
• D) paying less than the market wage

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Definitions:

Initial Cost

The initial expenditure required to acquire an asset or to start a project, incorporating all necessary expenses to bring it to a usable state.

Net Present Value

This signifies the net difference in present value terms of cash received versus cash paid out over an outlined time interval.

Internal Rate of Return

The discount rate at which the net present value of all cash flows (both positive and negative) from a project or investment equals zero.

Decision Rule

A guideline or criterion that aids in making choices between alternative courses of action.