Which of the Following Statements Is Not a Problem Associated

question 89

Multiple Choice

Which of the following statements is not a problem associated with executive ownership?

• A) It increases executives' exposure to risk.
• B) It may lead some executives to become risk seekers.
• C) It causes executives to risk their human capital.
• D) It causes executives to risk their reputation.

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Definitions:

Internal Rate of Return (IRR)

The rate of growth a project is expected to generate, calculated as the discount rate that makes the net present value (NPV) of all cash flows equal to zero.

Payback Method

An investment analysis method that calculates the time required to recoup the cost of an investment, based on the cash flow it generates.

Capital Cost Allowance (CCA)

The Canada Revenue Agency’s term for depreciation when calculating taxes.

Depreciation

The methodical distribution of the expense of a physical asset across its lifespan.