Which of the Statements Below Relates to the Suitability Criterion

question 38

Multiple Choice

Which of the statements below relates to the suitability criterion for evaluating strategic option evaluation?

• A) Entering into a price war with a cash rich rival will be very expensive.
• B) Embarking on a strategy that will depress profits for the next three years may provoke shareholders criticism.
• C) Investing in an expensive new design system requiring risky sources of funding
• D) Investing in new production capacity is not a good idea with a recession forecast.

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Definitions:

Wage Rate

The fixed amount of compensation paid to an employee for their services.

Workers

Individuals engaged in any form of employment, contributing labor to produce goods or provide services.

Marginal Productivity Theory

A principle in economics that explains how the value of an economic input is determined by its marginal productivity, suggesting that factors of production are paid at rates equal to their productivity at the margin.

Labor-Demand Schedule

A representation of the quantity of labor that employers are willing to hire at different wage rates.