Steve Sells Traffic Signs and Tape to Municipalities

question 173

Multiple Choice

Steve sells traffic signs and tape to municipalities.In his region he has a few affluent communities that order the best items.Carla has even more communities in her region that are affluent,and she sells even more items.If their supervisor does not use some adjustment factor to account for the differences in regions when evaluating the performance of the two workers,the evaluations will exhibit

• A) adverse impact.
• B) halo effect.
• C) recency effect.
• D) opportunity bias.
• E) global bias.

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Definitions:

Total Cost Approach

A method of analysis that involves assessing all costs associated with a decision, including initial costs and ongoing operational costs.

Discount Rate

The interest rate used in discounting future cash flows to present value, often reflecting the cost of capital or risk level.

Present Value

The current worth of a future sum of money or stream of cash flows given a specified rate of return, used in evaluating investment opportunities.

Internal Rate of Return

A financial metric used to evaluate the profitability of an investment, representing the interest rate at which the net present value of all the cash flows (both positive and negative) from a project or investment equal zero.