Adams Audio Is Considering Whether to Make an Investment in a New

question 63

Multiple Choice

Adams Audio is considering whether to make an investment in a new type of technology. Which of the following factors should the company consider when it decides whether to undertake the investment?

• A) The company has already spent $3 million researching the technology.
• B) The new technology will affect the cash flows produced by its other operations.
• C) If the investment is not made, then the company will be able to sell one of its laboratories for $2 million.
• D) All of the factors above should be considered.
• E) Factors b and c should be considered.

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