Newman Automobiles Manufacturing Is Considering Two Alternative Investment Proposals with the Following

question 58

Multiple Choice

Newman Automobiles Manufacturing is considering two alternative investment proposals with the following data:
$$\begin{array} { | l | c | c | } \hline & \text { Proposal X} & \text { Proposal Y } \\\hline \text { Investment } & \$ 11,000,000 & \$ 450,000 \\\hline \text { Useful life } & { 5 \text { years } } &{ \text { 5 years } } \\\hline \text { Estimated annual net cash inflows for 5 years } & \$ 2,200,000 & \$ 99,000 \\\hline \text { Residual value } & \$ 55,000 & \$ 26,000 \\\hline \text { Depreciation method } & \text { Straight-line } & \text { Straight-line } \\\hline \text { Required rate of return } & 14 \% & 10 \% \\\hline\end{array}$$
Calculate accounting rate of return for Proposal Y.

• A) 10.91%
• B) 16.54%
• C) 10.64%
• D) 5.97%

Understand the equity theory, including inputs, outcomes, and perceptions of fairness in organizational contexts.

Recognize the significance of job characteristics and rewards in determining job satisfaction and pay disparities.

Appreciate the role of communication in influencing perceptions of fairness and satisfaction in the workplace.

Understand the psychological and physical implications of job demands, especially those requiring suppression of emotions.

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Definitions:

Possible Agreements

Potential understandings or contracts that could be reached between parties, often speculative until finalized.

Two Raters

Involves the assessment or evaluation of a subject by two independent judges or observers to measure reliability or agreement.

Content Validity

The extent to which a test measures all aspects of the concept it intends to measure.

Expert Consultation

The process of seeking guidance or knowledge from someone with specialized expertise or qualifications in a specific area.