Jessie, the Regional Manager of a Large Electronics Firm, Is

question 101

Multiple Choice

Jessie, the regional manager of a large electronics firm, is trying to determine whether a new warehouse for her firm would be a good investment. After discussing with her firm's financial managers, she concludes that the project carries a negative NPV (Net Present Value) . What should Jessie do and why?

• A) She should invest in the warehouse to increase profits since a negative NPV indicates that the firm needs to generate more funds to stay afloat.
• B) She should not invest in the warehouse since a negative NPV means that the present value of the future cash flows does not justify the cost of the warehouse.
• C) She should invest in the warehouse since a negative NPV means that the cost of financing the warehouse is within the company's budget for expenses.
• D) She should not invest in the warehouse since a negative NPV means that the firm cannot afford the investment.

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Definitions:

Environment

The surroundings or conditions in which a person, animal, or plant lives or operates, including natural and built environments.

Cerebral Cortex

The outer layer of the brain's cerebrum, involved in high-level functions such as sensation, voluntary muscle movement, thought, reasoning, and memory.

Lobes

Divisions or sections of an organ in the body, notably in the brain, defined by natural divisions like folds, grooves, or fissures.

Genotype

An organism's complete set of genetic material, including all of its genes, which can influence physical appearance, behavior, and disease risk.