A Manager Refuses to Replace an Existing Asset Even Though

question 45

Multiple Choice

A manager refuses to replace an existing asset even though an extensive analysis indicates that replacement is desirable.One possible explanation for the manager's action is that:

• A) A financial loss may be reported in the current period if the asset is replaced.
• B) The manager is concerned that his or her superior may think that the original asset purchase was a mistake on the part of the manager.
• C) The manager expects to be promoted or transferred in the near future and is concerned primarily about short-term performance.
• D) All of these answers are correct.

---

Definitions:

Unlimited Wants

The economic concept that humans have insatiable desires for goods and services, which exceeds the resources available to satisfy them.

Individuals

Single human beings, considered separately from society or as distinct entities with personal interests and responsibilities.

Fallacy of Composition

The error of assuming that what is true of a part is necessarily true of the whole.

Prosperity

A state of economic well-being characterized by high levels of income, employment, and production.