Which of the Following Is the Way Entities Set Their

question 40

Multiple Choice

Which of the following is the way entities set their required rate of return (RRR) for investments?

• A)the RRR is based on their own past performance
• B)the RRR is based on industry averages
• C)the RRR is determined by comparing the estimated ARR with currently available yields or returns from other investments outside their industries
• D)all of the options are methods used by entities to set their RRR

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Definitions:

Management by Exception

A management strategy where only significant deviations from set standards and performance are addressed, streamlining decision-making.

Management by Reinforcement

A leadership approach that emphasizes the use of positive reinforcements to shape behavior and achieve desired outcomes.

Negotiations

The process of discussing terms and conditions between parties with the aim of reaching an agreement or compromise.

Performance Management Process

A systematic approach to improving and managing employee performance through set objectives, feedback, and evaluations.