A Manager Refuses to Replace an Existing Asset Even Though

question 41

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 the above.

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Definitions:

Sectors

Distinct parts or areas within an economy, characterized by a specific kind of activity, such as the agricultural, manufacturing, or service sector.

Regressive Tax

A tax imposed in such a manner that the tax rate decreases as the amount subject to taxation increases, disproportionately affecting low-income earners.

General Sales Taxes

A tax imposed on sales transactions, usually calculated as a percentage of the sales price and collected by the seller at the point of purchase.