All of the Following Are Disadvantages of Comparative Systems EXCEPT

question 24

Multiple Choice

All of the following are disadvantages of comparative systems EXCEPT:

• A)Competitive behaviors may become a problem
• B)Relative distance between employees' performance is unclear
• C)Higher risk of leniency,severity,and central tendency biases
• D)Risk of legal issues

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Definitions:

IOS

Investment opportunity schedule. A schedule of capital budgeting projects arranged in decreasing order of IRR.

WACC

Weighted Average Cost of Capital; it represents a firm's blended cost of capital across all sources, including both debt and equity.

MCC Schedule

Marginal cost of capital schedule. A plot of the WACC (weighted average cost of capital) against the total amount of capital to be raised in a planning period. The MCC rises as more capital is raised and the costs of individual components experience step function increases.

Capital Spending

Refers to funds spent by a business or government on acquiring or maintaining physical assets such as property, plants, and equipment.