In Theory Using the Same Discount Rate to Evaluate All

question 124

Multiple Choice

In theory using the same discount rate to evaluate all projects can lead to

• A) rejection of low risk projects that should be accepted.
• B) acceptance of high risk projects that should be rejected.
• C) control of efforts by employees with a vested interested in a project to manipulate the discount rate.
• D) all of the above.

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Definitions:

Social System

An organized and structured arrangement of social institutions and patterns of relationships that collectively fulfill societal needs.

Information-based System

A system that primarily relies on data and facts to operate and make decisions.

Culture Definition

The sum of attitudes, customs, and beliefs that distinguishes one group of people from another, transmitted from generation to generation.

Relative Age Effect

The influence of a person's birth date on their achievement and development in domains such as sports and education, due to age grouping criteria.