Suppose a Manager Is Deciding Whether or Not to Purchase

question 27

Multiple Choice

Suppose a manager is deciding whether or not to purchase a piece of equipment to make an input internally and has completed the majority of the net present value (NPV) calculations. The manager has correctly calculated the NPV to be equal to: NPV = ($1.023 × Q) - $350,000, where Q is the annual quantity of the input the firm needs. In order for the NPV to be positive, the firm needs at least _______units of the input each year.

• A)153,985
• B)342,131
• C)350,369
• D)289,526

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Definitions:

Unconscious Motivation

A driving force behind behaviors that the individual is not aware of, deeply embedded in the unconscious mind.

Psychosexual Stages

Freud's theory of five developmental stages from infancy to adulthood, where pleasure shifts from one body part to another.

Phallic Stage

A phase in Freudian psychosexual development occurring in early childhood, where the libido's focus is on the genital area.