A manager who uses discounted cash flow methods to make capital budgeting decisions does not face goal-congruence issues if the accrual accounting rate of return is used for performance evaluation.

Question

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A manager using discounted cash flow methods may make different capital budgeting decisions compared to using the accrual accounting rate of return, which could create goal-congruence issues if the latter is used for performance evaluation.

A Manager Who Uses Discounted Cash Flow Methods to Make