The Forsite Company Is Screening Three New Product Ideas A) a Is Best, and B Is Worst

question 32

Multiple Choice

The Forsite Company is screening three new product ideas.Resource constraints allow only one idea to be commercialized at the present time.The following estimates have been made for the five performance criteria that management feels are most important.If the five criteria are equally weighted,what are the best and worst alternatives?
$\begin{array}{r}\text { Estimated Rating }\\\text { Product } \quad \quad\\\begin{array}{|l|c|c|c|}\hline \text { Performance Criterion } & \quad\text { A } & \text { B } & \text { C } \\\hline\text { 1. Demand uncertainty } & & & \\\text { and project risk } & 0.3 & 0.9 & 0.2 \\\hline \text { 2. Similarity to present } & & & \\\text { products } & 0.7 & 0.8 & 0.6 \\\hline \text { 3. Expected return on } & & & \\\text { investment } & 1.0 & 0.4 & 0.8 \\\hline \begin{array}{l}\text { 4. Compatibility with } \\\text { current manufacturing } \\\text { process }\end{array} & 0.4 & 0.7 & 0.6 \\\hline \text { 5. Competitive advantage } & 0.4 & 0.6 & 0.5\\\hline\end{array}\end{array}$

• A) A is best, and B is worst.
• B) B is best, and C is worst.
• C) B is best, and A is worst.
• D) C is best, and A is worst.

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Definitions:

NCI

Non-controlling interest, a portion of the equity in a subsidiary not attributable, directly or indirectly, to the parent company.

Consolidated Statement

Financial statements that represent the combined financials of a parent company and its subsidiaries, showing the total of assets, liabilities, and equities.

Financial Position

A snapshot of what a company owns and owes, represented on the balance sheet, including assets, liabilities, and equity at a specific point in time.

Date of Acquisition

The exact date on which one company obtains control of another, which is crucial for financial reporting and integration processes.