A manager refuses to replace an existing asset even though an extensive analysis indicates that replacement is desirable.One possible explanation for the manager's action is that:
A) A financial loss may be reported in the current period if the asset is replaced.
B) The manager is concerned that his or her superior may think that the original asset purchase was a mistake on the part of the manager.
C) The manager expects to be promoted or transferred in the near future and is concerned primarily about short-term performance.
D) All of the above.

Question

Quizplus · Accepted Answer

All of the given options are possible explanations for the manager's action. The manager may want to avoid reporting a financial loss in the current period, may be worried about his or her reputation with the superior, or may be focused on short-term performance due to an expectation of promotion or transfer in the near future. Therefore, the best choice is D.

A Manager Refuses to Replace an Existing Asset Even Though