Which of the Following Statements Is True About the Equity

question 97

Multiple Choice

Which of the following statements is true about the equity situation?

• A) People avoid having a comparison other.
• B) People tend to be tolerant of situations where they are under-rewarded.
• C) People have a low E-to-P expectancy.
• D) People feel more comfortable in situations where they receive proportionately more than others.
• E) People believe that their outcome/input ratio is similar to the outcome/input ratio of the comparison other.

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Definitions:

Payback Method

An approach within capital budgeting that determines how long it takes to regain the initial outlay for an investment.

Mutually Exclusive

This term describes options or decisions that cannot occur simultaneously; choosing one means forgoing the others.

Required Rate

The minimum percentage return that an investment must yield to be considered acceptable. It is essentially another term for the required return on investment, critical for financial planning and analysis.

Cash Flows

Cash flows are the net amount of cash and cash-equivalents being transferred into and out of a business.