The Capital Budget Should Be Consistent with the Firm's

question 85

Multiple Choice

The capital budget should be consistent with the firm's:

• A) historical growth in sales.
• B) strategic plans.
• C) current level of debt.
• D) dividend policy.

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Definitions:

Better-Than-Average Effect

The cognitive bias where individuals overestimate their own qualities and abilities compared to others.

Displacement

A psychological defense mechanism in which emotional impulses are redirected from a real object to a safer, substitute target.

Defense Mechanism

Unconscious psychological strategies used to cope with reality and maintain self-image.

Sublimation

A defense mechanism in psychology where unacceptable impulses or urges are transformed into more socially acceptable actions or behaviors.