Which of the Following Is a Good Reason to Use

question 61

Multiple Choice

Which of the following is a good reason to use divisional costs of capital?

• A) Division managers have no vested interest in underestimating the capital costs associated with their division.
• B) Divisional costs of capital reduce are relatively easy to estimate.
• C) Comparison firms are often engaged in various lines of business.
• D) The divisions of a company represent well-defined lines of business with different risk characteristics, for example oil and gas exploration and distribution through pipelines.

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Definitions:

Milgram Experiment

A psychological experiment conducted by Stanley Milgram in the 1960s to study obedience to authority, where participants were instructed to administer electric shocks to another person.

Stanford University Prison Experiment

A psychological study conducted by Philip Zimbardo in 1971 at Stanford University, where students were assigned roles of prisoners and guards to explore the effects of perceived power.

Generalization

Drawing a conclusion about a certain characteristic of a population based on a sample from it.

Logical Support

The provision of reasons or evidence to justify a claim or argument.