When Considering Projects for Implementation, Management Generally Has Three Options

question 96

Multiple Choice

When considering projects for implementation, management generally has three options. All of the following reflect possible managerial options EXCEPT that management could ____.

• A) attempt to find another combination of projects that would allow for a more complete utilization of available funds
• B) accept the current project or projects and hope that the preliminary analysis is correct
• C) choose to reject the projects under consideration and place the available funds in a short term security until the next period
• D) sell stock to raise sufficient capital to invest in the project if it is required to make it profitable

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Definitions:

Investment Account

An account held at a financial institution and managed by an investment dealer that contains securities for investment purposes.

Goodwill

Goodwill represents the excess of the purchase price over the fair market value of the net identifiable assets acquired in a business combination. It is an intangible asset associated with the purchase of one company by another.

Partial Equity Method

An accounting method used by companies to record their investments in other companies when they can exert significant influence but do not have full control.

Goodwill

An intangible asset that arises when a business is purchased for more than the fair value of its tangible and identifiable intangible assets.