Twin Hills Inc

question 22

Multiple Choice

Twin Hills Inc. is considering a proposed project. Given available information, it is currently estimated that the proposed project is risky but has a positive net present value. Which of the following factors would make the company less likely to adopt the current project?

• A) It is revealed that if the company proceeds with the proposed project, the company will lose two other accounts, both of which have positive NPVs.
• B) It is revealed that the company has an option to back out of the project 2 years from now, if it is discovered to be unprofitable.
• C) It is revealed that if the company proceeds with the project, it will have an option to repeat the project 4 years from now.
• D) Answers a and b are correct.
• E) Answers b and c are correct.

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Definitions:

Breadth

The range or variety of products or services offered by a company or available within a market.

Depth

The number of categories within a product line.

Product Line Expansion

Adding related products to an existing product line to cater to a broader market or capitalize on the brand's reputation.

Consumer Products

Goods produced for personal use by the general public, including a wide range of items from household goods to personal electronics.