Select the highlighted word in the sentence below that is either misspelled or used in an incorrect manner.

The manager's decision to cancle the project is affecting the team's morale

The correct option is cancle.

Let's analyze the highlighted words in the sentence to identify the error:
1. decision - Correctly spelled and properly used as a noun.
2. cancle - This is misspelled. The correct spelling of the verb is cancel.
3. affecting - Correctly spelled and correctly used as a verb meaning "having an effect on" or "influencing".
4. morale - Correctly spelled and properly used as a noun referring to confidence, enthusiasm, or state of mind of a group.

Therefore, the misspelled word that needs to be corrected is cancle (correct spelling: cancel).