Capital Budgeting (Reaction Paper Sample)

Response
Student’s Name
Institutional Affiliation
Response
I agree with you in the statement that managers create sabotage by providing false reports to prevent the firm from realizing profits. According to the research done by Brunner and Ostemaier (2006) managers have the ability to formulate a firm’s data for the firm to achieve profits or losses. Hurdle projects are meant to help firms reduce their risks. However, some managers create hurdle projects to induce sabotage in the firm. Honesty is very important in managerial posts as the managers ad depended by the entire firms while making investment decisions. Ways of ensuring honest is adopting formal organizational structure and ensuring accountability in firms. Accountability in management can be achieved by the firm requiring the financial managers to present analysis of the investment decisions (Ross et al. 2021). If firms are not keen sabotage projects can lead to losses and closure of films. Information on sabotage and honesty enables companies and managers exercise honesty i