Suppose a Manager Is Deciding Whether or Not to Purchase

question 62

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. If the firm needs 355,000 units of the input each year, the manager _______buy the equipment because the NPV is _ _______.

• A)should not; positive
• B)should not; negative
• C)should; positive
• D)should; negative

---

Definitions:

Brain Chemistry

Refers to the complex interactions of chemicals, neurotransmitters, and hormones within the brain that influence thoughts, emotions, and behavior.

Smooth Muscle

A type of muscle found within the walls of organs and structures such as the stomach, intestines, and blood vessels, controlling involuntary movements.

Voluntary

Actions or decisions made by free choice, without external coercion.

Cardiac

Relating to the heart and its functions in health and disease.