If Management Takes a Multiple-Year View in the Decision Model

question 87

Multiple Choice

If management takes a multiple-year view in the decision model and judges success according to the current year's results, a problem will occur in the ________.

• A) decision model
• B) performance evaluation model
• C) production evaluation model
• D) quantitative model

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Definitions:

Rescission

The act of revoking, cancelling, or annulling a contract, returning all parties involved to their positions prior to the agreement, often due to misrepresentation, fraud, or mutual mistake.

Materiality

The significance of information or an event in influencing decisions or actions based on its potential impact.

Innocent Misrepresentation

A false statement made by one party to another without knowing it was false, which may lead to the rescission of a contract.

Material

Important. In securities law, a fact is material if a reasonable person would consider it important in his decision to purchase shares or to vote shares.