The Limitations of Financial Performance Measures ________

question 129

Multiple Choice

The limitations of financial performance measures ________.

• A) lead management to use a time horizon of more than five years
• B) make it difficult for companies to create goal congruence
• C) lead management to use the gross book value of assets
• D) can be overcome by taking a broader view of performance

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Definitions:

Primacy Effect

The tendency to remember information that is presented first more effectively than information that is presented later.

Recency Effect

A psychological phenomenon where the most recently presented items or experiences are more likely to be remembered than those presented earlier.

Rote Rehearsal

A memorization technique based on repetition, where information is repeated over and over to keep it in short-term memory for longer periods.

Permanent Memory

A long-term storage of information in the brain, considered to be relatively stable and enduring over time.