Which of the following is a partial solution to motivate managers to accept proposed investments that are projected to generate net losses for the initial years, in spite of the internal rate of return expected to be greater than the required rate of return?

Question

Quizplus · Accepted Answer

Evaluating managers based on long-term profitability incentivizes them to consider the potential long-term benefits of investments, even if they initially generate net losses. This can help managers make decisions in the best interest of the company's overall financial health, rather than just focusing on short-term gains. Option B would encourage managers to prioritize short-term gains over long-term profitability, which could be detrimental to the company in the long run. Options C and D do not provide a solution to the problem of motivating managers to accept investments that may initially generate net losses but have long-term benefits.

Which of the Following Is a Partial Solution to Motivate