A Division Manager Was Considering a Project That Required a Significant

question 105

Multiple Choice

A division manager was considering a project that required a significant initial investment.If accepted, the project could have a negative impact on certain financial ratios that the firm was required to maintain to satisfy debt contracts.To ensure that the ratios would not be adversely affected by the investment, the manager would use which of the following capital investment models?

• A) payback period
• B) accounting rate of return
• C) net present value
• D) internal rate of return
• E) None of these.

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Definitions:

Stereotype Threat

The risk of conforming to stereotypes about one's social group, which can hinder performance and behavior.

Social Identity Threat

The experience of feeling at risk of confirming a negative stereotype about one's social group, which can negatively affect performance and wellbeing.

Self-affirmation

A psychological theory suggesting that individuals can maintain their sense of self-integrity by telling themselves (affirming) positive truths about themselves.

Stereotype Threat

The anxiety or concern experienced when one fears being judged or treated unfairly based on negative stereotypes about their group.