An Annuity Contract Will Pay You $4,000 a Year (End

question 52

Multiple Choice

An annuity contract will pay you $4,000 a year (end of year) for the next three years.Or,you can choose to receive $12,610 at the end of the third.Assuming that you can earn 8% on investments,you should

• A)choose to receive the $4,000 annuity payments.
• B)choose to receive the $12,610 payment.
• C)flip a coin to make the choice;each is equally attractive.
• D)flip a coin to make the choice;each is equally unattractive.

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Definitions:

Scientific Management

A management theory that analyzes and synthesizes workflows to improve economic efficiency, especially labor productivity.

Frederick Taylor

A mechanical engineer who is considered the father of scientific management, focusing on improving economic efficiency and labor productivity through systematic study.

Organizational Behaviour

The study of both group and individual performance and activity within an organization, and how these behaviours can be improved through leadership and control.

Turnover Problem

Issues arising from a high rate of employees leaving an organization, which can lead to decreased productivity and increased training and recruiting costs.