Question

43.      What is a general type of long-term capital investment that companies make?

a.	replacement and minor improvements
b.	training and development of employees
c.	advertising campaigns
d.	all of the above

44.      Systematic feedback to planners based on audits creates an environment in which planners will find less temptation to

a.	deflate their estimates of the benefits associated with their pet projects.
b.	inflate their estimates of the benefits associated with their pet projects.
c.	inflate their estimates of the costs associated with their pet projects.
d.	inflate their estimates of the prestige associated with their pet projects.

45.      What should a firm do to reduce the temptation for planners to inflate their estimates of the benefits associated with the project to get it approved?

a.	conduct regular capital investment post-audits.
b.	fire all managers who miss their cost or benefit estimates by more than 10 percent.
c.	recognize that the capital budgeting process is based on subjective estimates and that managers cannot control the actual project implementation.
d.	promote project managers that have the largest project(s) or number of employees.

Answer 1