The Total-Cost Approach and the Incremental-Cost Approach to Evaluating Two

question 133

Multiple Choice

The total-cost approach and the incremental-cost approach to evaluating two competing investment opportunities:

• A) are dissimilar in that one deals with net present value and the other deals with internal rate of return.
• B) are similar in that they will recommend the same alternative as the best.
• C) are dissimilar in that one uses the cost of capital as a discount rate and the other does not.
• D) are similar in that neither considers the time value of money.

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Definitions:

Authority-Oriented Decision Methods

Decision-making approaches that rely on a centralized figure or group in charge to make decisions for the organization.

Consult Individually Option

The choice to seek advice or guidance in a one-on-one setting rather than in group consultation.

Vroom-Jago

A leadership model that emphasizes decision-making styles and the involvement of team members in the decision-making process.

Leader-Participation Model

A theory in leadership studies that suggests the effectiveness of leadership styles varies depending on the task, the leader's personality, and team-members' characteristics.