Using accrual accounting to evaluate the performance of a manager may create conflicts with the use of DCF methods for capital budgeting. Frequently, the decision made using a DCF method will not report good “operating income” results in the project’s early years under accrual accounting. For this reason, managers are tempted to not use DCF methods even though the decisions based on them would be in the best interests of the company as a whole over the long run. True False: Using accrual accounting to evaluate the performance of a manager cannot create conflicts with the use of DCF methods for capital budgeting. False: Frequently, the decision made using a DCF method will report good “operating income” results in the project’s early years under accrual accounting. False: managers consistently use DCF methods even though the decisions based on them would be in the worst interests of the company as a whole over the long run. B, C, and D
Using accrual accounting to evaluate the performance of a manager may create conflicts with the use of DCF methods for capital budgeting. Frequently, the decision made using a DCF method will not report good “operating income” results in the project’s early years under accrual accounting. For this reason, managers are tempted to not use DCF methods even though the decisions based on them would be in the best interests of the company as a whole over the long run.
- True
- False: Using accrual accounting to evaluate the performance of a manager cannot create conflicts with the use of DCF methods for capital budgeting.
- False: Frequently, the decision made using a DCF method will report good “operating income” results in the project’s early years under accrual accounting.
- False: managers consistently use DCF methods even though the decisions based on them would be in the worst interests of the company as a whole over the long run.
- B, C, and D
Using accrual accounting to evaluate the performance of a manager may create conflicts with the use of DCF methods for capital budgeting. Frequently, the decision made using a DCF method will not report good “operating income” results in the project’s early years under accrual accounting. For this reason, managers are tempted to not use DCF methods even though the decisions based on them would be in the best interests of the company as a whole over the long run.
true
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