A Company Is Evaluating Three Possible Investments

question 70

Multiple Choice

A company is evaluating three possible investments. Following information is provided by the company. What is the payback period for Project A? (Assume that the company uses the straight-line depreciation method.)

• A)3.0 years
• B)2.0 years
• C)4.0 years
• D)5.0 years

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Definitions:

Equity Theory

A theory in social psychology that explains how individuals perceive fairness in the distribution of resources within their interpersonal relationships.

Motivation

The psychological process that arouses and directs goal-oriented behavior.

Perceived Inequity

A feeling or perception that one's inputs or contributions are not being rewarded or recognized fairly relative to others.

Theory X

Theory X is a management concept that assumes employees are inherently lazy and will avoid work if possible, suggesting the need for strict oversight and control.