Should Tangshan Mining Company Accept a New Project If Its

question 15

Multiple Choice

Should Tangshan Mining company accept a new project if its maximum payback is 3.5 years and its initial after-tax cost is $5,000,000 and it is expected to provide after-tax operating cash inflows of $1,800,000 in year 1, $1,900,000 in year 2, $700,000 in year 3, and $1,800,000 in year 4?

• A) Yes, since the payback period of the project is less than the maximum acceptable payback period.
• B) No, since the payback period of the project is more than the maximum acceptable payback period.
• C) Yes, since the risk exposure of the project is less than the maximum acceptable risk exposure.
• D) No, since the risk exposure of the project is more than the maximum acceptable risk exposure.

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Definitions:

Psychological Empowerment

The extent to which employees feel a sense of personal fulfillment and intent when carrying out tasks, together with a belief that their work contributes to some larger purpose.

Competence

The ability to do something successfully or efficiently, often referring to a specific skill set or knowledge area.

Self-determination

The right or ability of individuals or groups to make their own choices and control their own lives.

Job Characteristics Model

Five core dimensions of jobs: skill variety, task identity, task significance, autonomy, and feedback