If a Firm with an Asset Base of $3 Million

question 78

Multiple Choice

If a firm with an asset base of $3 million recently added $150,000 to retained earnings after a dividend payment of $100,000,then its internal growth rate is:

• A) 1.67%.
• B) 3.33%.
• C) 5.00%.
• D) 8.33%.

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Definitions:

Groupthink

A mode of thinking that people engage in when they are deeply involved in a cohesive group, and when members striving for unanimity override their motivation to realistically appraise alternative courses of action; in contrast to group strength, groupthink results in mistakes and failure. Causes of groupthink include the illusion of invulnerability, belief in the inherent morality of the group, rationalization, stereotyping of out-groups, self-censorship, direct pressure, mindguards, and the illusion of unanimity.

Cohesiveness

The quality of forming a united whole, particularly in the context of group dynamics and teamwork.

Insulated Group

A group that is isolated or protected from external pressures or influences, often to maintain focus or cohesion.

Team Concept

Refers to the understanding and approach of working collaboratively with others towards a common goal.