The Following Actions by Managers Are Examples of Overinvestment

question 37

Multiple Choice

The following actions by managers are examples of overinvestment:

• A)entrenching investments.
• B)empire building.
• C)entrenching investments and empire building.
• D)entrenching investments, empire building, and investing beyond the point where NPV falls to zero.

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Definitions:

Piece Rate

A pay plan in which workers are paid a fixed sum for each unit of production completed.

Individual-Level

Pertaining to or focusing on actions, reactions, or impacts on a single person, as opposed to groups or organizations.

Merit Pay

A pay plan consisting of a pay rise which is linked directly to performance.

Job Design

The process of organizing tasks, duties, and responsibilities into a productive unit of work to achieve certain objectives.