You Are a Manager Considering a Positive-NPV Project

question 70

Multiple Choice

You are a manager considering a positive-NPV project. Which of the following announcements indicate that you may have underestimated its NPV?

• A)Two critical industry suppliers announce that they will merge their firms.
• B)A key competitor releases earnings results, and its stock price drops by 25 percent in response.
• C)You just found out that the project's chief engineer has recently received multiple job offers from competing firms.
• D)Your marketing staff alerts you that the new project may "cannibalize" sales (i.e., reduce sales)of existing product to a greater extent.