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Refer to the Scenario Below to Answer the Following Questions

question 7

Multiple Choice

Refer to the scenario below to answer the following questions.
General Administrative Theory at Tidy Tilda's (Scenario)
Penny owns Tidy Tilda's, a housecleaning service. She has been in operation for more than three years and has a steady client list which she hopes to expand as she tries to grow the business. She has ten cleaners who work for her on various assignments five days a week. The way she has structured the operation is that for each assignment, cleaners work in pairs, and for the occasional big job, in threes. Majority of her clients are homeowners, but occasionally she gets a bigger contract from offices and other businesses. The assignments usually take one day and the cleaners report into the office in the morning and at the end of their shift. For the occasional big job, which might take up to three days and three or four cleaners, Penny negotiates different terms. Penny's management style and techniques follow closely Fayol's principles of management as she aspires to build an adaptable organization.
-Evita, one of the new cleaners approached Penny one day after the others had gone home. Evita wanted some clarification on the roles in the company. She said that Alice, her partner on the assignments this week, had given her completely different instructions from what Penny had said. Evita wanted to know who she should follow. Penny explained to her that she would receive orders from only Penny herself. In management terms this would point to __________.

Definitions:

Capital Budgeting

The process of evaluating and selecting long-term investments that are in line with the goal of shareholders' wealth maximization.

Time Value of Money

A financial principle that posits money available now is worth more than the same amount in the future due to its potential earning capacity.

Hurdle Rate

A financial metric indicating the minimum return on investment required for a project or investment to be considered acceptable.

Internal Rate of Return

A financial metric used to estimate the profitability of potential investments, calculating the discount rate that makes the net present value of all cash flows from the investment equal to zero.