A Company Finds That the Residual Value of $10,000 for the Equipment

question 90

Multiple Choice

A company finds that the residual value of $10,000 for the equipment in a capital budgeting project has been inadvertently omitted from the calculation of the net present value (NPV) for that project.How does this omission affect the NPV of that project?

• A)The project's NPV should be $10,000 higher with the residual value included.
• B)The project's NPV should be higher,but be less than $10,000 higher,with the residual value included.
• C)The project's NPV should be $10,000 lower with the residual value included.
• D)The project's NPV should be lower,but be less than $10,000 lower,with the residual value included.

---

Definitions:

Scientific Management

A management theory that analyzes and synthesizes workflows, improving labor productivity by scientifically studying job tasks.

Job Enrichment

A method of motivating employees by providing them with variety in their tasks and opportunities for growth and responsibility.

Job Specialization

The process of focusing one's work and skill development on a specific area of expertise to increase efficiency and productivity.

Task Significance

The degree to which a job has a substantial impact on the lives or work of other people, within or outside the organization.